Correlation Between Nauticus Robotics and A2Z Smart

Can any of the company-specific risk be diversified away by investing in both Nauticus Robotics and A2Z Smart 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 A2Z Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nauticus Robotics and A2Z Smart Technologies, you can compare the effects of market volatilities on Nauticus Robotics and A2Z Smart 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 A2Z Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nauticus Robotics and A2Z Smart.

Diversification Opportunities for Nauticus Robotics and A2Z Smart

-0.05

Correlation Coefficient

Nauticus Robotics  A2Z Smart

Good diversification

The 3 months correlation between Nauticus and A2Z is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and A2Z Smart Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2Z Smart 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 A2Z Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2Z Smart Technologies has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and A2Z Smart go up and down completely randomly.

Pair Corralation between Nauticus Robotics and A2Z Smart

Assuming the 90 days horizon Nauticus Robotics is expected to generate 10.51 times more return on investment than A2Z Smart. However, Nauticus Robotics is 10.51 times more volatile than A2Z Smart Technologies. It trades about 0.19 of its potential returns per unit of risk. A2Z Smart Technologies is currently generating about 0.05 per unit of risk. If you would invest  1.11  in Nauticus Robotics on November 28, 2024 and sell it today you would earn a total of  5.56  from holding Nauticus Robotics or generate 500.9% 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.  A2Z Smart Technologies

Nauticus Robotics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nauticus Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

A2Z Smart Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Smart Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, A2Z Smart showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nauticus Robotics and A2Z Smart

The main advantage of trading using opposite Nauticus Robotics and A2Z Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nauticus Robotics position performs unexpectedly, A2Z Smart 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 A2Z Smart will offset losses from the drop in A2Z Smart's long position.

The idea behind Nauticus Robotics and A2Z Smart 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.