Correlation Between Innovative Solutions and Nauticus Robotics

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

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

Diversification Opportunities for Innovative Solutions and Nauticus Robotics

-0.62

Correlation Coefficient

Innovative Solutions  Nauticus Robotics

Excellent diversification

The 3 months correlation between Innovative and Nauticus is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and Innovative Solutions 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 Innovative Solutions and 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 Innovative Solutions i.e., Innovative Solutions and Nauticus Robotics go up and down completely randomly.

Pair Corralation between Innovative Solutions and Nauticus Robotics

Given the investment horizon of 90 days Innovative Solutions and is expected to generate 0.3 times more return on investment than Nauticus Robotics. However, Innovative Solutions and is 3.37 times less risky than Nauticus Robotics. It trades about 0.09 of its potential returns per unit of risk. Nauticus Robotics is currently generating about -0.05 per unit of risk. If you would invest  701.00  in Innovative Solutions and on September 2, 2024 and sell it today you would earn a total of  75.00  from holding Innovative Solutions and or generate 10.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Innovative Solutions and  vs.  Nauticus Robotics

Innovative Solutions and

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Solutions and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Innovative Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Innovative Solutions and Nauticus Robotics

The main advantage of trading using opposite Innovative Solutions and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions 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 Innovative Solutions and 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.