Correlation Between Nukkleus and IGEN Networks

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

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

Diversification Opportunities for Nukkleus and IGEN Networks

0.0

Correlation Coefficient

Nukkleus  IGEN Networks

Pay attention - limited upside

The 3 months correlation between Nukkleus and IGEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and IGEN Networks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGEN Networks Corp 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 IGEN Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGEN Networks Corp has no effect on the direction of Nukkleus i.e., Nukkleus and IGEN Networks go up and down completely randomly.

Pair Corralation between Nukkleus and IGEN Networks

Given the investment horizon of 90 days Nukkleus is expected to generate 2.0 times less return on investment than IGEN Networks. But when comparing it to its historical volatility, Nukkleus is 1.32 times less risky than IGEN Networks. It trades about 0.05 of its potential returns per unit of risk. IGEN Networks Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.19  in IGEN Networks Corp on October 25, 2024 and sell it today you would lose (0.18) from holding IGEN Networks Corp or give up 94.74% of portfolio value over 90 days.

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

Nukkleus  vs.  IGEN Networks Corp

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.

IGEN Networks Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IGEN Networks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, IGEN Networks is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nukkleus and IGEN Networks

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

The idea behind Nukkleus and IGEN Networks Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.