Correlation Between Nauticus Robotics and HNR Acquisition

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

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

Diversification Opportunities for Nauticus Robotics and HNR Acquisition

-0.56

Correlation Coefficient

Nauticus Robotics  HNR Acquisition

Excellent diversification

The 3 months correlation between Nauticus and HNR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and HNR Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNR Acquisition Corp 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 HNR Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNR Acquisition Corp has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and HNR Acquisition go up and down completely randomly.

Pair Corralation between Nauticus Robotics and HNR Acquisition

Assuming the 90 days horizon Nauticus Robotics is expected to generate 2.4 times more return on investment than HNR Acquisition. However, Nauticus Robotics is 2.4 times more volatile than HNR Acquisition Corp. It trades about 0.13 of its potential returns per unit of risk. HNR Acquisition Corp is currently generating about -0.29 per unit of risk. If you would invest  1.55  in Nauticus Robotics on October 3, 2024 and sell it today you would earn a total of  3.45  from holding Nauticus Robotics or generate 222.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	15.66%
Values	Daily Returns

Nauticus Robotics  vs.  HNR Acquisition Corp

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 fairly weak basic indicators, Nauticus Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

HNR Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HNR Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HNR Acquisition is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nauticus Robotics and HNR Acquisition

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

The idea behind Nauticus Robotics and HNR Acquisition Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.