Correlation Between Kraken Robotics and Schmitt Industries

Can any of the company-specific risk be diversified away by investing in both Kraken Robotics and Schmitt Industries at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kraken Robotics and Schmitt Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kraken Robotics and Schmitt Industries, you can compare the effects of market volatilities on Kraken Robotics and Schmitt Industries and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kraken Robotics with a short position of Schmitt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Robotics and Schmitt Industries.

Diversification Opportunities for Kraken Robotics and Schmitt Industries

-0.32

Correlation Coefficient

Kraken Robotics  Schmitt Industries

Very good diversification

The 3 months correlation between Kraken and Schmitt is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and Schmitt Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schmitt Industries and Kraken Robotics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kraken Robotics are associated (or correlated) with Schmitt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schmitt Industries has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and Schmitt Industries go up and down completely randomly.

Pair Corralation between Kraken Robotics and Schmitt Industries

If you would invest  45.00  in Kraken Robotics on September 4, 2024 and sell it today you would earn a total of  121.00  from holding Kraken Robotics or generate 268.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Kraken Robotics  vs.  Schmitt Industries

Kraken Robotics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Kraken Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Schmitt Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schmitt Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Schmitt Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kraken Robotics and Schmitt Industries

The main advantage of trading using opposite Kraken Robotics and Schmitt Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Robotics position performs unexpectedly, Schmitt Industries can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Schmitt Industries will offset losses from the drop in Schmitt Industries' long position.

The idea behind Kraken Robotics and Schmitt Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.