Correlation Between Pennexx Foods and Nukkleus

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

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

Diversification Opportunities for Pennexx Foods and Nukkleus

0.45

Correlation Coefficient

Pennexx Foods  Nukkleus

Very weak diversification

The 3 months correlation between Pennexx and Nukkleus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pennexx Foods and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus and Pennexx Foods 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 Pennexx Foods are associated (or correlated) with Nukkleus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nukkleus has no effect on the direction of Pennexx Foods i.e., Pennexx Foods and Nukkleus go up and down completely randomly.

Pair Corralation between Pennexx Foods and Nukkleus

Given the investment horizon of 90 days Pennexx Foods is expected to generate 0.74 times more return on investment than Nukkleus. However, Pennexx Foods is 1.36 times less risky than Nukkleus. It trades about -0.01 of its potential returns per unit of risk. Nukkleus is currently generating about -0.08 per unit of risk. If you would invest  1.60  in Pennexx Foods on December 20, 2024 and sell it today you would lose (0.40) from holding Pennexx Foods or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pennexx Foods  vs.  Nukkleus

Pennexx Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pennexx Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with Pennexx Foods and Nukkleus

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

The idea behind Pennexx Foods and Nukkleus 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.