Correlation Between Nukkleus and Fastbase

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

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

Diversification Opportunities for Nukkleus and Fastbase

-0.14

Correlation Coefficient

Nukkleus  Fastbase

Good diversification

The 3 months correlation between Nukkleus and Fastbase is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and Fastbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastbase 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 Fastbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastbase has no effect on the direction of Nukkleus i.e., Nukkleus and Fastbase go up and down completely randomly.

Pair Corralation between Nukkleus and Fastbase

Given the investment horizon of 90 days Nukkleus is expected to generate 1.26 times less return on investment than Fastbase. In addition to that, Nukkleus is 1.34 times more volatile than Fastbase. It trades about 0.05 of its total potential returns per unit of risk. Fastbase is currently generating about 0.08 per unit of volatility. If you would invest  150.00  in Fastbase on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Fastbase or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Nukkleus  vs.  Fastbase

Nukkleus

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nukkleus are ranked lower than 12 (%) 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.

Fastbase

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fastbase are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Fastbase exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nukkleus and Fastbase

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

The idea behind Nukkleus and Fastbase 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.