Correlation Between Kraken Energy and CanAlaska Uranium

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

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

Diversification Opportunities for Kraken Energy and CanAlaska Uranium

0.24

Correlation Coefficient

Kraken Energy  CanAlaska Uranium

Modest diversification

The 3 months correlation between Kraken and CanAlaska is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and CanAlaska Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanAlaska Uranium and Kraken Energy 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 Energy Corp are associated (or correlated) with CanAlaska Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanAlaska Uranium has no effect on the direction of Kraken Energy i.e., Kraken Energy and CanAlaska Uranium go up and down completely randomly.

Pair Corralation between Kraken Energy and CanAlaska Uranium

Assuming the 90 days horizon Kraken Energy Corp is expected to generate 2.96 times more return on investment than CanAlaska Uranium. However, Kraken Energy is 2.96 times more volatile than CanAlaska Uranium. It trades about 0.03 of its potential returns per unit of risk. CanAlaska Uranium is currently generating about 0.06 per unit of risk. If you would invest  2.00  in Kraken Energy Corp on December 30, 2024 and sell it today you would lose (0.45) from holding Kraken Energy Corp or give up 22.5% of portfolio value over 90 days.

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

Kraken Energy Corp  vs.  CanAlaska Uranium

Kraken Energy Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Energy Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kraken Energy reported solid returns over the last few months and may actually be approaching a breakup point.

CanAlaska Uranium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CanAlaska Uranium are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CanAlaska Uranium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kraken Energy and CanAlaska Uranium

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

The idea behind Kraken Energy Corp and CanAlaska Uranium 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.