Correlation Between Therma Bright and Kraken Robotics

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

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

Diversification Opportunities for Therma Bright and Kraken Robotics

-0.67

Correlation Coefficient

Therma Bright  Kraken Robotics

Excellent diversification

The 3 months correlation between Therma and Kraken is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Therma Bright and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Therma Bright 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 Therma Bright 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 Therma Bright i.e., Therma Bright and Kraken Robotics go up and down completely randomly.

Pair Corralation between Therma Bright and Kraken Robotics

If you would invest  7.00  in Therma Bright on October 10, 2024 and sell it today you would lose (3.00) from holding Therma Bright or give up 42.86% of portfolio value over 90 days.

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

Therma Bright  vs.  Kraken Robotics

Therma Bright

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Therma Bright are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Therma Bright showed solid returns over the last few months and may actually be approaching a breakup point.

Kraken Robotics

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Kraken Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Therma Bright and Kraken Robotics

The main advantage of trading using opposite Therma Bright and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Therma Bright 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 Therma Bright 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.