Correlation Between Nauticus Robotics and BAE Systems
Can any of the company-specific risk be diversified away by investing in both Nauticus Robotics and BAE Systems 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 Nauticus Robotics and BAE Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nauticus Robotics and BAE Systems PLC, you can compare the effects of market volatilities on Nauticus Robotics and BAE Systems 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 Nauticus Robotics with a short position of BAE Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nauticus Robotics and BAE Systems.
Diversification Opportunities for Nauticus Robotics and BAE Systems
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nauticus and BAE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and BAE Systems PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAE Systems PLC and Nauticus Robotics 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 Nauticus Robotics are associated (or correlated) with BAE Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAE Systems PLC has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and BAE Systems go up and down completely randomly.
Pair Corralation between Nauticus Robotics and BAE Systems
Given the investment horizon of 90 days Nauticus Robotics is expected to under-perform the BAE Systems. In addition to that, Nauticus Robotics is 4.85 times more volatile than BAE Systems PLC. It trades about -0.09 of its total potential returns per unit of risk. BAE Systems PLC is currently generating about 0.07 per unit of volatility. 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 |
Nauticus Robotics vs. BAE Systems PLC
Performance |
| Timeline |
| Nauticus Robotics |
| BAE Systems PLC |
Nauticus Robotics and BAE Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nauticus Robotics and BAE Systems
The main advantage of trading using opposite Nauticus Robotics and BAE Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nauticus Robotics position performs unexpectedly, BAE Systems 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 BAE Systems will offset losses from the drop in BAE Systems' long position.| Nauticus Robotics vs. Park Electrochemical | Nauticus Robotics vs. National Presto Industries | Nauticus Robotics vs. Ducommun Incorporated | Nauticus Robotics vs. Innovative Solutions and |
| BAE Systems vs. Huntington Ingalls Industries | BAE Systems vs. Rheinmetall AG ADR | BAE Systems vs. Airbus Group NV | BAE Systems vs. General Dynamics |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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