Correlation Between Boeing and Nauticus Robotics

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

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

Diversification Opportunities for Boeing and Nauticus Robotics

-0.18

Correlation Coefficient

Boeing  Nauticus Robotics

Good diversification

The 3 months correlation between Boeing and Nauticus is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Nauticus Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nauticus Robotics and Boeing 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 The Boeing 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 Boeing i.e., Boeing and Nauticus Robotics go up and down completely randomly.

Pair Corralation between Boeing and Nauticus Robotics

Allowing for the 90-day total investment horizon Boeing is expected to generate 95.73 times less return on investment than Nauticus Robotics. But when comparing it to its historical volatility, The Boeing is 15.85 times less risky than Nauticus Robotics. It trades about 0.02 of its potential returns per unit of risk. Nauticus Robotics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5.40  in Nauticus Robotics on December 26, 2024 and sell it today you would earn a total of  2.65  from holding Nauticus Robotics or generate 49.07% return on investment over 90 days.

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

The Boeing  vs.  Nauticus Robotics

Boeing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nauticus Robotics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 9 (%) 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.

Pair Trading with Boeing and Nauticus Robotics

The main advantage of trading using opposite Boeing and Nauticus Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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 The Boeing 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.