Correlation Between Noble Rock and Kernel Group

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

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

Diversification Opportunities for Noble Rock and Kernel Group

-0.11

Correlation Coefficient

Noble Rock  Kernel Group

Good diversification

The 3 months correlation between Noble and Kernel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Noble Rock Acquisition and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings and Noble Rock 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 Noble Rock Acquisition are associated (or correlated) with Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Noble Rock i.e., Noble Rock and Kernel Group go up and down completely randomly.

Pair Corralation between Noble Rock and Kernel Group

If you would invest (100.00) in Kernel Group Holdings on September 16, 2024 and sell it today you would earn a total of  100.00  from holding Kernel Group Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Noble Rock Acquisition  vs.  Kernel Group Holdings

Noble Rock Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Rock Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Noble Rock is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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. In spite of fairly stable essential indicators, Kernel Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Noble Rock and Kernel Group

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

The idea behind Noble Rock Acquisition and Kernel Group Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.