Correlation Between MKS Instruments and Kraken Robotics

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

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

Diversification Opportunities for MKS Instruments and Kraken Robotics

0.48

Correlation Coefficient

MKS Instruments  Kraken Robotics

Very weak diversification

The 3 months correlation between MKS and Kraken is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and MKS Instruments 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 MKS Instruments 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 MKS Instruments i.e., MKS Instruments and Kraken Robotics go up and down completely randomly.

Pair Corralation between MKS Instruments and Kraken Robotics

Given the investment horizon of 90 days MKS Instruments is expected to generate 3.7 times less return on investment than Kraken Robotics. But when comparing it to its historical volatility, MKS Instruments is 1.28 times less risky than Kraken Robotics. It trades about 0.04 of its potential returns per unit of risk. Kraken Robotics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Kraken Robotics on September 13, 2024 and sell it today you would earn a total of  156.00  from holding Kraken Robotics or generate 380.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

MKS Instruments  vs.  Kraken Robotics

MKS Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MKS Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MKS Instruments is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Kraken Robotics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 14 (%) 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.

Pair Trading with MKS Instruments and Kraken Robotics

The main advantage of trading using opposite MKS Instruments and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments 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 MKS Instruments 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.