Correlation Between Astronics and Nauticus Robotics

Can any of the company-specific risk be diversified away by investing in both Astronics 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 Astronics and Nauticus Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astronics and Nauticus Robotics, you can compare the effects of market volatilities on Astronics 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 Astronics with a short position of Nauticus Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and Nauticus Robotics.

Diversification Opportunities for Astronics and Nauticus Robotics

0.63

Correlation Coefficient

Astronics  Nauticus Robotics

Poor diversification

The 3 months correlation between Astronics and Nauticus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and Astronics 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 Astronics 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 Astronics i.e., Astronics and Nauticus Robotics go up and down completely randomly.

Pair Corralation between Astronics and Nauticus Robotics

Given the investment horizon of 90 days Astronics is expected to under-perform the Nauticus Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Astronics is 1.96 times less risky than Nauticus Robotics. The stock trades about -0.1 of its potential returns per unit of risk. The Nauticus Robotics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1.55  in Nauticus Robotics on September 2, 2024 and sell it today you would lose (0.44) from holding Nauticus Robotics or give up 28.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Astronics  vs.  Nauticus Robotics

Astronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Nauticus Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nauticus Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Astronics and Nauticus Robotics

The main advantage of trading using opposite Astronics and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics 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.

The idea behind Astronics and Nauticus Robotics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.