Correlation Between Nauticus Robotics and TRIMBLE

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

By analyzing existing cross correlation between Nauticus Robotics and TRIMBLE INC 475, you can compare the effects of market volatilities on Nauticus Robotics and TRIMBLE 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 TRIMBLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nauticus Robotics and TRIMBLE.

Diversification Opportunities for Nauticus Robotics and TRIMBLE

-0.36

Correlation Coefficient

Nauticus Robotics  TRIMBLE

Very good diversification

The 3 months correlation between Nauticus and TRIMBLE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and TRIMBLE INC 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIMBLE INC 475 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 TRIMBLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIMBLE INC 475 has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and TRIMBLE go up and down completely randomly.

Pair Corralation between Nauticus Robotics and TRIMBLE

Assuming the 90 days horizon Nauticus Robotics is expected to generate 10.75 times more return on investment than TRIMBLE. However, Nauticus Robotics is 10.75 times more volatile than TRIMBLE INC 475. It trades about 0.29 of its potential returns per unit of risk. TRIMBLE INC 475 is currently generating about -0.17 per unit of risk. If you would invest  1.12  in Nauticus Robotics on September 28, 2024 and sell it today you would earn a total of  0.85  from holding Nauticus Robotics or generate 75.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	20.0%
Values	Daily Returns

Nauticus Robotics  vs.  TRIMBLE INC 475

Nauticus Robotics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nauticus Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

TRIMBLE INC 475

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRIMBLE INC 475 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TRIMBLE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nauticus Robotics and TRIMBLE

The main advantage of trading using opposite Nauticus Robotics and TRIMBLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nauticus Robotics position performs unexpectedly, TRIMBLE 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 TRIMBLE will offset losses from the drop in TRIMBLE's long position.

The idea behind Nauticus Robotics and TRIMBLE INC 475 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.