Correlation Between Esker SA and Nukkleus

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

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

Diversification Opportunities for Esker SA and Nukkleus

0.65

Correlation Coefficient

Esker SA  Nukkleus

Poor diversification

The 3 months correlation between Esker and Nukkleus is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus and Esker SA 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 Esker SA 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 Esker SA i.e., Esker SA and Nukkleus go up and down completely randomly.

Pair Corralation between Esker SA and Nukkleus

Assuming the 90 days horizon Esker SA is expected to generate 0.11 times more return on investment than Nukkleus. However, Esker SA is 9.19 times less risky than Nukkleus. It trades about -0.11 of its potential returns per unit of risk. Nukkleus is currently generating about -0.1 per unit of risk. If you would invest  29,892  in Esker SA on December 29, 2024 and sell it today you would lose (1,857) from holding Esker SA or give up 6.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.77%
Values	Daily Returns

Esker SA  vs.  Nukkleus

Esker SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Esker SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 Esker SA and Nukkleus

The main advantage of trading using opposite Esker SA and Nukkleus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA 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 Esker SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.