Correlation Between Nauticus Robotics and PEPSICO

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

By analyzing existing cross correlation between Nauticus Robotics and PEPSICO INC 275, you can compare the effects of market volatilities on Nauticus Robotics and PEPSICO 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 PEPSICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nauticus Robotics and PEPSICO.

Diversification Opportunities for Nauticus Robotics and PEPSICO

-0.63

Correlation Coefficient

Nauticus Robotics  PEPSICO

Excellent diversification

The 3 months correlation between Nauticus and PEPSICO is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nauticus Robotics and PEPSICO INC 275 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC 275 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 PEPSICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPSICO INC 275 has no effect on the direction of Nauticus Robotics i.e., Nauticus Robotics and PEPSICO go up and down completely randomly.

Pair Corralation between Nauticus Robotics and PEPSICO

Assuming the 90 days horizon Nauticus Robotics is expected to generate 254.47 times more return on investment than PEPSICO. However, Nauticus Robotics is 254.47 times more volatile than PEPSICO INC 275. It trades about 0.21 of its potential returns per unit of risk. PEPSICO INC 275 is currently generating about 0.01 per unit of risk. If you would invest  1.31  in Nauticus Robotics on October 12, 2024 and sell it today you would earn a total of  15.69  from holding Nauticus Robotics or generate 1197.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

Nauticus Robotics  vs.  PEPSICO INC 275

Nauticus Robotics

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nauticus Robotics are ranked lower than 16 (%) 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.

PEPSICO INC 275

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PEPSICO INC 275 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PEPSICO is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nauticus Robotics and PEPSICO

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

The idea behind Nauticus Robotics and PEPSICO INC 275 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.