Correlation Between Nukkleus and Astra Veda

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

By analyzing existing cross correlation between Nukkleus and Astra Veda, you can compare the effects of market volatilities on Nukkleus and Astra Veda 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 Nukkleus with a short position of Astra Veda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nukkleus and Astra Veda.

Diversification Opportunities for Nukkleus and Astra Veda

0.18

Correlation Coefficient

Nukkleus  Astra Veda

Average diversification

The 3 months correlation between Nukkleus and Astra is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and Astra Veda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Veda and Nukkleus 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 Nukkleus are associated (or correlated) with Astra Veda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Veda has no effect on the direction of Nukkleus i.e., Nukkleus and Astra Veda go up and down completely randomly.

Pair Corralation between Nukkleus and Astra Veda

Given the investment horizon of 90 days Nukkleus is expected to under-perform the Astra Veda. But the stock apears to be less risky and, when comparing its historical volatility, Nukkleus is 2.96 times less risky than Astra Veda. The stock trades about -0.08 of its potential returns per unit of risk. The Astra Veda is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Astra Veda on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Astra Veda or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nukkleus  vs.  Astra Veda

Nukkleus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nukkleus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Astra Veda

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Astra Veda are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Astra Veda sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nukkleus and Astra Veda

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

The idea behind Nukkleus and Astra Veda 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 Anywhere module to track or share privately all of your investments from the convenience of any device.