Correlation Between Energous and Kraken Robotics

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

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

Diversification Opportunities for Energous and Kraken Robotics

-0.82

Correlation Coefficient

Energous  Kraken Robotics

Pay attention - limited upside

The 3 months correlation between Energous and Kraken is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Energous and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Energous 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 Energous 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 Energous i.e., Energous and Kraken Robotics go up and down completely randomly.

Pair Corralation between Energous and Kraken Robotics

Given the investment horizon of 90 days Energous is expected to under-perform the Kraken Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Energous is 1.1 times less risky than Kraken Robotics. The stock trades about -0.23 of its potential returns per unit of risk. The Kraken Robotics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Kraken Robotics on September 21, 2024 and sell it today you would earn a total of  46.00  from holding Kraken Robotics or generate 35.94% return on investment over 90 days.

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

Energous  vs.  Kraken Robotics

Energous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kraken Robotics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Kraken Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energous and Kraken Robotics

The main advantage of trading using opposite Energous and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energous 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 Energous 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.