Correlation Between Kernel Group and Perception Capital

Can any of the company-specific risk be diversified away by investing in both Kernel Group and Perception Capital 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 Kernel Group and Perception Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kernel Group Holdings and Perception Capital Corp, you can compare the effects of market volatilities on Kernel Group and Perception Capital 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 Kernel Group with a short position of Perception Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kernel Group and Perception Capital.

Diversification Opportunities for Kernel Group and Perception Capital

0.14

Correlation Coefficient

Kernel Group  Perception Capital

Average diversification

The 3 months correlation between Kernel and Perception is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kernel Group Holdings and Perception Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perception Capital Corp and Kernel Group 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 Kernel Group Holdings are associated (or correlated) with Perception Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perception Capital Corp has no effect on the direction of Kernel Group i.e., Kernel Group and Perception Capital go up and down completely randomly.

Pair Corralation between Kernel Group and Perception Capital

If you would invest  1,121  in Perception Capital Corp on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Perception Capital Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kernel Group Holdings  vs.  Perception Capital Corp

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kernel Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Perception Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kernel Group and Perception Capital

The main advantage of trading using opposite Kernel Group and Perception Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kernel Group position performs unexpectedly, Perception Capital 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 Perception Capital will offset losses from the drop in Perception Capital's long position.

The idea behind Kernel Group Holdings and Perception Capital Corp 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.