Correlation Between Nauticus Robotics and Triumph

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

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

Diversification Opportunities for Nauticus Robotics and Triumph

0.03

Correlation Coefficient

Nauticus Robotics  Triumph

Significant diversification

The 3 months correlation between Nauticus and Triumph is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group 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 Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and Triumph go up and down completely randomly.

Pair Corralation between Nauticus Robotics and Triumph

Given the investment horizon of 90 days Nauticus Robotics is expected to under-perform the Triumph. But the stock apears to be less risky and, when comparing its historical volatility, Nauticus Robotics is 1.28 times less risky than Triumph. The stock trades about -0.22 of its potential returns per unit of risk. The Triumph Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,900  in Triumph Group on November 19, 2024 and sell it today you would earn a total of  631.00  from holding Triumph Group or generate 33.21% return on investment over 90 days.

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

Nauticus Robotics  vs.  Triumph Group

Nauticus Robotics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 9 (%) 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.

Triumph Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Triumph demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nauticus Robotics and Triumph

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

The idea behind Nauticus Robotics and Triumph Group 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.