Correlation Between Kraken Robotics and Aurora Solar

Can any of the company-specific risk be diversified away by investing in both Kraken Robotics and Aurora Solar 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 Aurora Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kraken Robotics and Aurora Solar Technologies, you can compare the effects of market volatilities on Kraken Robotics and Aurora Solar 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 Aurora Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Robotics and Aurora Solar.

Diversification Opportunities for Kraken Robotics and Aurora Solar

-0.68

Correlation Coefficient

Kraken Robotics  Aurora Solar

Excellent diversification

The 3 months correlation between Kraken and Aurora is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and Aurora Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Solar Technologies 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 Aurora Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Solar Technologies has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and Aurora Solar go up and down completely randomly.

Pair Corralation between Kraken Robotics and Aurora Solar

Assuming the 90 days horizon Kraken Robotics is expected to generate 1.09 times less return on investment than Aurora Solar. But when comparing it to its historical volatility, Kraken Robotics is 2.91 times less risky than Aurora Solar. It trades about 0.05 of its potential returns per unit of risk. Aurora Solar Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Aurora Solar Technologies on October 9, 2024 and sell it today you would lose (0.50) from holding Aurora Solar Technologies or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

Kraken Robotics  vs.  Aurora Solar Technologies

Kraken Robotics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kraken Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

Aurora Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kraken Robotics and Aurora Solar

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

The idea behind Kraken Robotics and Aurora Solar Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.