Correlation Between Kraken Energy and Golden Tag

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

Diversification Opportunities for Kraken Energy and Golden Tag

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Kraken and Golden is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and Golden Tag Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tag Resources 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 Golden Tag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tag Resources has no effect on the direction of Kraken Energy i.e., Kraken Energy and Golden Tag go up and down completely randomly.

Pair Corralation between Kraken Energy and Golden Tag

If you would invest  9.00  in Golden Tag Resources on September 11, 2024 and sell it today you would earn a total of  0.00  from holding Golden Tag Resources or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy1.56%
ValuesDaily Returns

Kraken Energy Corp  vs.  Golden Tag Resources

 Performance 
       Timeline  
Kraken Energy Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Golden Tag Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Golden Tag Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Golden Tag is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kraken Energy and Golden Tag Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kraken Energy and Golden Tag

The main advantage of trading using opposite Kraken Energy and Golden Tag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Energy position performs unexpectedly, Golden Tag 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 Golden Tag will offset losses from the drop in Golden Tag's long position.
The idea behind Kraken Energy Corp and Golden Tag Resources 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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