Correlation Between Nexoptic Technology and Kraken Robotics

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

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

Diversification Opportunities for Nexoptic Technology and Kraken Robotics

0.73

Correlation Coefficient

Nexoptic Technology  Kraken Robotics

Poor diversification

The 3 months correlation between Nexoptic and Kraken is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nexoptic Technology Corp and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Nexoptic 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 Nexoptic Technology Corp 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 Nexoptic Technology i.e., Nexoptic Technology and Kraken Robotics go up and down completely randomly.

Pair Corralation between Nexoptic Technology and Kraken Robotics

Assuming the 90 days horizon Nexoptic Technology is expected to generate 2.31 times less return on investment than Kraken Robotics. In addition to that, Nexoptic Technology is 2.54 times more volatile than Kraken Robotics. It trades about 0.02 of its total potential returns per unit of risk. Kraken Robotics is currently generating about 0.1 per unit of volatility. If you would invest  56.00  in Kraken Robotics on September 19, 2024 and sell it today you would earn a total of  201.00  from holding Kraken Robotics or generate 358.93% return on investment over 90 days.

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

Nexoptic Technology Corp  vs.  Kraken Robotics

Nexoptic Technology Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nexoptic Technology Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nexoptic Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Kraken Robotics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kraken Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexoptic Technology and Kraken Robotics

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

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.