Correlation Between Nukkleus and Dear Cashmere

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

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

Diversification Opportunities for Nukkleus and Dear Cashmere

0.19

Correlation Coefficient

Nukkleus  Dear Cashmere

Average diversification

The 3 months correlation between Nukkleus and Dear is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and Dear Cashmere Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dear Cashmere Holding 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 Dear Cashmere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dear Cashmere Holding has no effect on the direction of Nukkleus i.e., Nukkleus and Dear Cashmere go up and down completely randomly.

Pair Corralation between Nukkleus and Dear Cashmere

Given the investment horizon of 90 days Nukkleus is expected to under-perform the Dear Cashmere. But the stock apears to be less risky and, when comparing its historical volatility, Nukkleus is 1.0 times less risky than Dear Cashmere. The stock trades about -0.08 of its potential returns per unit of risk. The Dear Cashmere Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Dear Cashmere Holding on December 20, 2024 and sell it today you would lose (4.00) from holding Dear Cashmere Holding or give up 26.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Nukkleus  vs.  Dear Cashmere Holding

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.

Dear Cashmere Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dear Cashmere Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal fundamental indicators, Dear Cashmere may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nukkleus and Dear Cashmere

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

The idea behind Nukkleus and Dear Cashmere Holding 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.