Correlation Between Foxx Development and Nukkleus

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

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

Diversification Opportunities for Foxx Development and Nukkleus

-0.03

Correlation Coefficient

Foxx Development  Nukkleus

Good diversification

The 3 months correlation between Foxx and Nukkleus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus and Foxx Development 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 Foxx Development Holdings 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 Foxx Development i.e., Foxx Development and Nukkleus go up and down completely randomly.

Pair Corralation between Foxx Development and Nukkleus

Given the investment horizon of 90 days Foxx Development Holdings is expected to generate 1.48 times more return on investment than Nukkleus. However, Foxx Development is 1.48 times more volatile than Nukkleus. It trades about 0.04 of its potential returns per unit of risk. Nukkleus is currently generating about -0.11 per unit of risk. If you would invest  627.00  in Foxx Development Holdings on December 19, 2024 and sell it today you would lose (127.00) from holding Foxx Development Holdings or give up 20.26% of portfolio value over 90 days.

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

Foxx Development Holdings  vs.  Nukkleus

Foxx Development Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Foxx Development Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Foxx Development showed 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 Foxx Development and Nukkleus

The main advantage of trading using opposite Foxx Development and Nukkleus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxx Development 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 Foxx Development Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.