Correlation Between Nukkleus and Wirecard

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

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

Diversification Opportunities for Nukkleus and Wirecard

0.04

Correlation Coefficient

Nukkleus  Wirecard

Significant diversification

The 3 months correlation between Nukkleus and Wirecard is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nukkleus and Wirecard AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirecard AG 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 Wirecard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirecard AG has no effect on the direction of Nukkleus i.e., Nukkleus and Wirecard go up and down completely randomly.

Pair Corralation between Nukkleus and Wirecard

Given the investment horizon of 90 days Nukkleus is expected to generate 2.43 times less return on investment than Wirecard. But when comparing it to its historical volatility, Nukkleus is 1.91 times less risky than Wirecard. It trades about 0.11 of its potential returns per unit of risk. Wirecard AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.90  in Wirecard AG on October 8, 2024 and sell it today you would earn a total of  0.10  from holding Wirecard AG or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Nukkleus  vs.  Wirecard AG

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.

Wirecard AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wirecard AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Wirecard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nukkleus and Wirecard

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

The idea behind Nukkleus and Wirecard AG 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.