Correlation Between KULR Technology and Peninsula Energy

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

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

Diversification Opportunities for KULR Technology and Peninsula Energy

0.8

Correlation Coefficient

KULR Technology  Peninsula Energy

Very poor diversification

The 3 months correlation between KULR and Peninsula is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and KULR Technology 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 KULR Technology Group are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of KULR Technology i.e., KULR Technology and Peninsula Energy go up and down completely randomly.

Pair Corralation between KULR Technology and Peninsula Energy

Given the investment horizon of 90 days KULR Technology is expected to generate 5.09 times less return on investment than Peninsula Energy. But when comparing it to its historical volatility, KULR Technology Group is 8.8 times less risky than Peninsula Energy. It trades about 0.21 of its potential returns per unit of risk. Peninsula Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5.75  in Peninsula Energy on September 13, 2024 and sell it today you would earn a total of  72.25  from holding Peninsula Energy or generate 1256.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

KULR Technology Group  vs.  Peninsula Energy

KULR Technology Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Peninsula Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peninsula Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Peninsula Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KULR Technology and Peninsula Energy

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

The idea behind KULR Technology Group and Peninsula Energy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.