Correlation Between Blue Lagoon and Nukkleus

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

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

Diversification Opportunities for Blue Lagoon and Nukkleus

-0.41

Correlation Coefficient

Blue Lagoon  Nukkleus

Very good diversification

The 3 months correlation between Blue and Nukkleus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Blue Lagoon Resources and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus and Blue Lagoon 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 Blue Lagoon Resources are associated (or correlated) with Nukkleus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nukkleus has no effect on the direction of Blue Lagoon i.e., Blue Lagoon and Nukkleus go up and down completely randomly.

Pair Corralation between Blue Lagoon and Nukkleus

Assuming the 90 days horizon Blue Lagoon Resources is expected to generate 0.98 times more return on investment than Nukkleus. However, Blue Lagoon Resources is 1.02 times less risky than Nukkleus. It trades about 0.13 of its potential returns per unit of risk. Nukkleus is currently generating about -0.08 per unit of risk. If you would invest  11.00  in Blue Lagoon Resources on December 20, 2024 and sell it today you would earn a total of  8.00  from holding Blue Lagoon Resources or generate 72.73% return on investment over 90 days.

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

Blue Lagoon Resources  vs.  Nukkleus

Blue Lagoon Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Lagoon Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Blue Lagoon reported solid returns over the last few months and may actually be approaching a breakup point.

Nukkleus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nukkleus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Blue Lagoon and Nukkleus

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

The idea behind Blue Lagoon Resources and Nukkleus 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.