Correlation Between DigiAsia Corp and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both DigiAsia Corp and Nextnav Acquisition 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 DigiAsia Corp and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DigiAsia Corp and Nextnav Acquisition Corp, you can compare the effects of market volatilities on DigiAsia Corp and Nextnav Acquisition 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 DigiAsia Corp with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiAsia Corp and Nextnav Acquisition.
Diversification Opportunities for DigiAsia Corp and Nextnav Acquisition
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between DigiAsia and Nextnav is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and Nextnav Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextnav Acquisition Corp and DigiAsia Corp 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 DigiAsia Corp are associated (or correlated) with Nextnav Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextnav Acquisition Corp has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between DigiAsia Corp and Nextnav Acquisition
Given the investment horizon of 90 days DigiAsia Corp is expected to generate 2.29 times more return on investment than Nextnav Acquisition. However, DigiAsia Corp is 2.29 times more volatile than Nextnav Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about -0.07 per unit of risk. If you would invest 52.00 in DigiAsia Corp on December 8, 2024 and sell it today you would earn a total of 2.00 from holding DigiAsia Corp or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DigiAsia Corp vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| DigiAsia Corp |
| Nextnav Acquisition Corp |
DigiAsia Corp and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DigiAsia Corp and Nextnav Acquisition
The main advantage of trading using opposite DigiAsia Corp and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigiAsia Corp position performs unexpectedly, Nextnav Acquisition 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 Nextnav Acquisition will offset losses from the drop in Nextnav Acquisition's long position.| DigiAsia Corp vs. Compania Cervecerias Unidas | ||
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Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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