Correlation Between Nukkleus and BASE

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

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

Diversification Opportunities for Nukkleus and BASE

0.65

Correlation Coefficient

Nukkleus  BASE

Poor diversification

The 3 months correlation between Nukkleus and BASE is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc 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 BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of Nukkleus i.e., Nukkleus and BASE go up and down completely randomly.

Pair Corralation between Nukkleus and BASE

Given the investment horizon of 90 days Nukkleus is expected to generate 22.72 times more return on investment than BASE. However, Nukkleus is 22.72 times more volatile than BASE Inc. It trades about 0.18 of its potential returns per unit of risk. BASE Inc is currently generating about 0.21 per unit of risk. If you would invest  273.00  in Nukkleus on October 7, 2024 and sell it today you would earn a total of  1,977  from holding Nukkleus or generate 724.18% return on investment over 90 days.

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

Nukkleus  vs.  BASE Inc

Nukkleus

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nukkleus are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating forward-looking signals, Nukkleus disclosed solid returns over the last few months and may actually be approaching a breakup point.

BASE Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BASE Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, BASE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nukkleus and BASE

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

The idea behind Nukkleus and BASE 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .