Correlation Between Nauticus Robotics and L3Harris Technologies

Can any of the company-specific risk be diversified away by investing in both Nauticus Robotics and L3Harris Technologies 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 Nauticus Robotics and L3Harris Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nauticus Robotics and L3Harris Technologies, you can compare the effects of market volatilities on Nauticus Robotics and L3Harris Technologies 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 Nauticus Robotics with a short position of L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nauticus Robotics and L3Harris Technologies.

Diversification Opportunities for Nauticus Robotics and L3Harris Technologies

-0.24

Correlation Coefficient

Nauticus Robotics  L3Harris Technologies

Very good diversification

The 3 months correlation between Nauticus and L3Harris is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies and Nauticus Robotics 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 Nauticus Robotics are associated (or correlated) with L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and L3Harris Technologies go up and down completely randomly.

Pair Corralation between Nauticus Robotics and L3Harris Technologies

Given the investment horizon of 90 days Nauticus Robotics is expected to generate 33.91 times more return on investment than L3Harris Technologies. However, Nauticus Robotics is 33.91 times more volatile than L3Harris Technologies. It trades about 0.3 of its potential returns per unit of risk. L3Harris Technologies is currently generating about -0.46 per unit of risk. If you would invest  108.00  in Nauticus Robotics on October 8, 2024 and sell it today you would earn a total of  272.00  from holding Nauticus Robotics or generate 251.85% return on investment over 90 days.

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

Nauticus Robotics  vs.  L3Harris Technologies

Nauticus Robotics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Nauticus Robotics unveiled solid returns over the last few months and may actually be approaching a breakup point.

L3Harris Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days L3Harris Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nauticus Robotics and L3Harris Technologies

The main advantage of trading using opposite Nauticus Robotics and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nauticus Robotics position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' long position.

The idea behind Nauticus Robotics and L3Harris Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.