Correlation Between Kraken Robotics and Solution Financial

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

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

Diversification Opportunities for Kraken Robotics and Solution Financial

-0.75

Correlation Coefficient

Kraken Robotics  Solution Financial

Pay attention - limited upside

The 3 months correlation between Kraken and Solution is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and Solution Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Financial 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 Solution Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Financial has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and Solution Financial go up and down completely randomly.

Pair Corralation between Kraken Robotics and Solution Financial

Assuming the 90 days horizon Kraken Robotics is expected to generate 2.09 times more return on investment than Solution Financial. However, Kraken Robotics is 2.09 times more volatile than Solution Financial. It trades about 0.22 of its potential returns per unit of risk. Solution Financial is currently generating about -0.06 per unit of risk. If you would invest  114.00  in Kraken Robotics on September 12, 2024 and sell it today you would earn a total of  83.00  from holding Kraken Robotics or generate 72.81% 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.  Solution Financial

Kraken Robotics

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Kraken Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Solution Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solution Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kraken Robotics and Solution Financial

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

The idea behind Kraken Robotics and Solution Financial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.