Correlation Between Nauticus Robotics and CONSTELLATION

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

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

Diversification Opportunities for Nauticus Robotics and CONSTELLATION

-0.39

Correlation Coefficient

Nauticus Robotics  CONSTELLATION

Very good diversification

The 3 months correlation between Nauticus and CONSTELLATION is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and CONSTELLATION BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTELLATION BRANDS INC 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 CONSTELLATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTELLATION BRANDS INC has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and CONSTELLATION go up and down completely randomly.

Pair Corralation between Nauticus Robotics and CONSTELLATION

Assuming the 90 days horizon Nauticus Robotics is expected to generate 6.03 times less return on investment than CONSTELLATION. But when comparing it to its historical volatility, Nauticus Robotics is 4.31 times less risky than CONSTELLATION. It trades about 0.05 of its potential returns per unit of risk. CONSTELLATION BRANDS INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8,914  in CONSTELLATION BRANDS INC on October 3, 2024 and sell it today you would lose (399.00) from holding CONSTELLATION BRANDS INC or give up 4.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.94%
Values	Daily Returns

Nauticus Robotics  vs.  CONSTELLATION BRANDS INC

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.

CONSTELLATION BRANDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSTELLATION BRANDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CONSTELLATION BRANDS INC investors.

Pair Trading with Nauticus Robotics and CONSTELLATION

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

The idea behind Nauticus Robotics and CONSTELLATION BRANDS INC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.