Correlation Between Business Warrior and Nukkleus

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

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

Diversification Opportunities for Business Warrior and Nukkleus

0.48

Correlation Coefficient

Business Warrior  Nukkleus

Very weak diversification

The 3 months correlation between Business and Nukkleus is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Business Warrior and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus and Business Warrior 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 Business Warrior 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 Business Warrior i.e., Business Warrior and Nukkleus go up and down completely randomly.

Pair Corralation between Business Warrior and Nukkleus

Given the investment horizon of 90 days Business Warrior is expected to generate 3.45 times more return on investment than Nukkleus. However, Business Warrior is 3.45 times more volatile than Nukkleus. It trades about 0.08 of its potential returns per unit of risk. Nukkleus is currently generating about -0.05 per unit of risk. If you would invest  0.05  in Business Warrior on December 24, 2024 and sell it today you would lose (0.02) from holding Business Warrior or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Business Warrior  vs.  Nukkleus

Business Warrior

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Business Warrior are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Business Warrior 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 Business Warrior and Nukkleus

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

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.