Correlation Between Nukkleus and NamSys

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

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

Diversification Opportunities for Nukkleus and NamSys

0.23

Correlation Coefficient

Nukkleus  NamSys

Modest diversification

The 3 months correlation between Nukkleus and NamSys is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and NamSys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NamSys 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 NamSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NamSys Inc has no effect on the direction of Nukkleus i.e., Nukkleus and NamSys go up and down completely randomly.

Pair Corralation between Nukkleus and NamSys

Given the investment horizon of 90 days Nukkleus is expected to under-perform the NamSys. In addition to that, Nukkleus is 2.06 times more volatile than NamSys Inc. It trades about -0.07 of its total potential returns per unit of risk. NamSys Inc is currently generating about -0.01 per unit of volatility. If you would invest  90.00  in NamSys Inc on December 22, 2024 and sell it today you would lose (13.00) from holding NamSys Inc or give up 14.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Nukkleus  vs.  NamSys Inc

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.

NamSys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days NamSys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NamSys is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nukkleus and NamSys

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

The idea behind Nukkleus and NamSys 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.