Correlation Between Nauticus Robotics and Heico

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

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

Diversification Opportunities for Nauticus Robotics and Heico

-0.24

Correlation Coefficient

Nauticus Robotics  Heico

Very good diversification

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

Pair Corralation between Nauticus Robotics and Heico

Assuming the 90 days horizon Nauticus Robotics is expected to generate 15.77 times more return on investment than Heico. However, Nauticus Robotics is 15.77 times more volatile than Heico. It trades about 0.11 of its potential returns per unit of risk. Heico is currently generating about 0.09 per unit of risk. If you would invest  5.00  in Nauticus Robotics on December 29, 2024 and sell it today you would earn a total of  1.39  from holding Nauticus Robotics or generate 27.8% 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.  Heico

Nauticus Robotics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 8 (%) 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.

Heico

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heico are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Heico may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nauticus Robotics and Heico

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

The idea behind Nauticus Robotics and Heico 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.