Correlation Between General Dynamics and Nauticus Robotics
Can any of the company-specific risk be diversified away by investing in both General Dynamics 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 General Dynamics and Nauticus Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Nauticus Robotics, you can compare the effects of market volatilities on General Dynamics 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 General Dynamics with a short position of Nauticus Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Nauticus Robotics.
Diversification Opportunities for General Dynamics and Nauticus Robotics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Nauticus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and General Dynamics 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 General Dynamics 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 General Dynamics i.e., General Dynamics and Nauticus Robotics go up and down completely randomly.
Pair Corralation between General Dynamics and Nauticus Robotics
Allowing for the 90-day total investment horizon General Dynamics is expected to generate 0.22 times more return on investment than Nauticus Robotics. However, General Dynamics is 4.45 times less risky than Nauticus Robotics. It trades about -0.14 of its potential returns per unit of risk. Nauticus Robotics is currently generating about -0.06 per unit of risk. If you would invest 30,137 in General Dynamics on August 31, 2024 and sell it today you would lose (1,906) from holding General Dynamics or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Dynamics vs. Nauticus Robotics
Performance |
| Timeline |
| General Dynamics |
| Nauticus Robotics |
General Dynamics and Nauticus Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Nauticus Robotics
The main advantage of trading using opposite General Dynamics and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics 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.| General Dynamics vs. Lockheed Martin | General Dynamics vs. Raytheon Technologies Corp | General Dynamics vs. L3Harris Technologies | General Dynamics vs. Huntington Ingalls Industries |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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