Correlation Between BAE Systems and Nauticus Robotics
Can any of the company-specific risk be diversified away by investing in both BAE Systems and Nauticus 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 BAE Systems and Nauticus Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAE Systems PLC and Nauticus Robotics, you can compare the effects of market volatilities on BAE Systems and Nauticus 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 BAE Systems with a short position of Nauticus Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAE Systems and Nauticus Robotics.
Diversification Opportunities for BAE Systems and Nauticus Robotics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BAE and Nauticus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BAE Systems PLC and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and BAE Systems 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 BAE Systems PLC are associated (or correlated) with Nauticus Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nauticus Robotics has no effect on the direction of BAE Systems i.e., BAE Systems and Nauticus Robotics go up and down completely randomly.
Pair Corralation between BAE Systems and Nauticus Robotics
Assuming the 90 days horizon BAE Systems PLC is expected to generate 0.21 times more return on investment than Nauticus Robotics. However, BAE Systems PLC is 4.85 times less risky than Nauticus Robotics. It trades about 0.07 of its potential returns per unit of risk. Nauticus Robotics is currently generating about -0.09 per unit of risk. If you would invest 978.00 in BAE Systems PLC on August 29, 2024 and sell it today you would earn a total of 672.00 from holding BAE Systems PLC or generate 68.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BAE Systems PLC vs. Nauticus Robotics
Performance |
| Timeline |
| BAE Systems PLC |
| Nauticus Robotics |
BAE Systems and Nauticus Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAE Systems and Nauticus Robotics
The main advantage of trading using opposite BAE Systems and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAE Systems position performs unexpectedly, Nauticus 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 Nauticus Robotics will offset losses from the drop in Nauticus Robotics' long position.| BAE Systems vs. Huntington Ingalls Industries | BAE Systems vs. Rheinmetall AG ADR | BAE Systems vs. Airbus Group NV | BAE Systems vs. General Dynamics |
| Nauticus Robotics vs. Park Electrochemical | Nauticus Robotics vs. National Presto Industries | Nauticus Robotics vs. Ducommun Incorporated | Nauticus Robotics vs. Innovative Solutions and |
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 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.
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