Correlation Between Kraken Energy and Global Atomic

Can any of the company-specific risk be diversified away by investing in both Kraken Energy and Global Atomic 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 Global Atomic 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 Global Atomic Corp, you can compare the effects of market volatilities on Kraken Energy and Global Atomic 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 Global Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Energy and Global Atomic.

Diversification Opportunities for Kraken Energy and Global Atomic

0.69

Correlation Coefficient

Kraken Energy  Global Atomic

Poor diversification

The 3 months correlation between Kraken and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and Global Atomic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Atomic Corp 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 Global Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Atomic Corp has no effect on the direction of Kraken Energy i.e., Kraken Energy and Global Atomic go up and down completely randomly.

Pair Corralation between Kraken Energy and Global Atomic

Assuming the 90 days horizon Kraken Energy Corp is expected to under-perform the Global Atomic. In addition to that, Kraken Energy is 1.93 times more volatile than Global Atomic Corp. It trades about -0.01 of its total potential returns per unit of risk. Global Atomic Corp is currently generating about -0.02 per unit of volatility. If you would invest  88.00  in Global Atomic Corp on September 3, 2024 and sell it today you would lose (10.00) from holding Global Atomic Corp or give up 11.36% of portfolio value over 90 days.

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

Kraken Energy Corp  vs.  Global Atomic Corp

Kraken Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kraken Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kraken Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Global Atomic Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Atomic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Global Atomic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kraken Energy and Global Atomic

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

The idea behind Kraken Energy Corp and Global Atomic Corp 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.