Correlation Between Kraken Robotics and DynaCERT

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

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

Diversification Opportunities for Kraken Robotics and DynaCERT

-0.79

Correlation Coefficient

Kraken Robotics  DynaCERT

Pay attention - limited upside

The 3 months correlation between Kraken and DynaCERT is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and DynaCERT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DynaCERT 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 DynaCERT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DynaCERT has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and DynaCERT go up and down completely randomly.

Pair Corralation between Kraken Robotics and DynaCERT

Assuming the 90 days horizon Kraken Robotics is expected to generate 0.94 times more return on investment than DynaCERT. However, Kraken Robotics is 1.07 times less risky than DynaCERT. It trades about 0.05 of its potential returns per unit of risk. DynaCERT is currently generating about -0.09 per unit of risk. If you would invest  252.00  in Kraken Robotics on October 9, 2024 and sell it today you would earn a total of  14.00  from holding Kraken Robotics or generate 5.56% return on investment over 90 days.

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

Kraken Robotics  vs.  DynaCERT

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.

DynaCERT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DynaCERT 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 very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kraken Robotics and DynaCERT

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

The idea behind Kraken Robotics and DynaCERT 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.