Correlation Between Nauticus Robotics and Aleafia Health

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

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

Diversification Opportunities for Nauticus Robotics and Aleafia Health

0.97

Correlation Coefficient

Nauticus Robotics  Aleafia Health

Almost no diversification

The 3 months correlation between Nauticus and Aleafia is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and Aleafia Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aleafia Health 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 Aleafia Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aleafia Health has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and Aleafia Health go up and down completely randomly.

Pair Corralation between Nauticus Robotics and Aleafia Health

If you would invest  1.39  in Nauticus Robotics on October 4, 2024 and sell it today you would earn a total of  2.40  from holding Nauticus Robotics or generate 172.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	4.55%
Values	Daily Returns

Nauticus Robotics  vs.  Aleafia Health

Nauticus Robotics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Nauticus Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

Aleafia Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aleafia Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aleafia Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nauticus Robotics and Aleafia Health

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

The idea behind Nauticus Robotics and Aleafia Health 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.