Correlation Between Telus Corp and Kraken Robotics

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

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

Diversification Opportunities for Telus Corp and Kraken Robotics

-0.51

Correlation Coefficient

Telus Corp  Kraken Robotics

Excellent diversification

The 3 months correlation between Telus and Kraken is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Telus Corp 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 Telus Corp are associated (or correlated) with Kraken Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Robotics has no effect on the direction of Telus Corp i.e., Telus Corp and Kraken Robotics go up and down completely randomly.

Pair Corralation between Telus Corp and Kraken Robotics

Given the investment horizon of 90 days Telus Corp is expected to under-perform the Kraken Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Telus Corp is 4.22 times less risky than Kraken Robotics. The stock trades about -0.11 of its potential returns per unit of risk. The Kraken Robotics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Kraken Robotics on September 14, 2024 and sell it today you would earn a total of  108.00  from holding Kraken Robotics or generate 63.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Telus Corp  vs.  Kraken Robotics

Telus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Kraken Robotics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 15 (%) 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.

Pair Trading with Telus Corp and Kraken Robotics

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

The idea behind Telus Corp and Kraken Robotics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.