Correlation Between Elbit Systems and Nauticus Robotics
Can any of the company-specific risk be diversified away by investing in both Elbit 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 Elbit 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 Elbit Systems and Nauticus Robotics, you can compare the effects of market volatilities on Elbit 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 Elbit Systems with a short position of Nauticus Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Nauticus Robotics.
Diversification Opportunities for Elbit Systems and Nauticus Robotics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elbit and Nauticus is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and Elbit 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 Elbit Systems 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 Elbit Systems i.e., Elbit Systems and Nauticus Robotics go up and down completely randomly.
Pair Corralation between Elbit Systems and Nauticus Robotics
Given the investment horizon of 90 days Elbit Systems is expected to generate 3.28 times less return on investment than Nauticus Robotics. But when comparing it to its historical volatility, Elbit Systems is 12.62 times less risky than Nauticus Robotics. It trades about 0.05 of its potential returns per unit of risk. Nauticus Robotics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7.71 in Nauticus Robotics on August 27, 2024 and sell it today you would lose (6.55) from holding Nauticus Robotics or give up 84.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.89% |
| Values | Daily Returns |
Elbit Systems vs. Nauticus Robotics
Performance |
| Timeline |
| Elbit Systems |
| Nauticus Robotics |
Elbit Systems and Nauticus Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Nauticus Robotics
The main advantage of trading using opposite Elbit Systems and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit 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.| Elbit Systems vs. Redwire Corp | Elbit Systems vs. Sidus Space | Elbit Systems vs. Rocket Lab USA | Elbit Systems vs. Momentus |
| Nauticus Robotics vs. Nauticus Robotics | Nauticus Robotics vs. Chardan NexTech Acquisition | Nauticus Robotics vs. Arbe Robotics Ltd | Nauticus Robotics vs. Gorilla Technology Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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