Correlation Between Woodward and Nauticus Robotics
Can any of the company-specific risk be diversified away by investing in both Woodward 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 Woodward and Nauticus Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodward and Nauticus Robotics, you can compare the effects of market volatilities on Woodward 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 Woodward with a short position of Nauticus Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodward and Nauticus Robotics.
Diversification Opportunities for Woodward and Nauticus Robotics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woodward and Nauticus is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Woodward and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and Woodward 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 Woodward 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 Woodward i.e., Woodward and Nauticus Robotics go up and down completely randomly.
Pair Corralation between Woodward and Nauticus Robotics
Considering the 90-day investment horizon Woodward is expected to generate 0.2 times more return on investment than Nauticus Robotics. However, Woodward is 5.04 times less risky than Nauticus Robotics. It trades about 0.16 of its potential returns per unit of risk. Nauticus Robotics is currently generating about -0.09 per unit of risk. If you would invest 16,417 in Woodward on August 24, 2024 and sell it today you would earn a total of 837.00 from holding Woodward or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woodward vs. Nauticus Robotics
Performance |
| Timeline |
| Woodward |
| Nauticus Robotics |
Woodward and Nauticus Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodward and Nauticus Robotics
The main advantage of trading using opposite Woodward and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodward 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.| Woodward vs. Hexcel | Woodward vs. Ducommun Incorporated | Woodward vs. Mercury Systems | Woodward vs. AAR Corp |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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