Correlation Between FTAC Emerald and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both FTAC Emerald and NextNav Warrant 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 FTAC Emerald and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAC Emerald Acquisition and NextNav Warrant, you can compare the effects of market volatilities on FTAC Emerald and NextNav Warrant 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 FTAC Emerald with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAC Emerald and NextNav Warrant.
Diversification Opportunities for FTAC Emerald and NextNav Warrant
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTAC and NextNav is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FTAC Emerald Acquisition and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and FTAC Emerald 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 FTAC Emerald Acquisition are associated (or correlated) with NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of FTAC Emerald i.e., FTAC Emerald and NextNav Warrant go up and down completely randomly.
Pair Corralation between FTAC Emerald and NextNav Warrant
Assuming the 90 days horizon FTAC Emerald Acquisition is expected to generate 5.58 times more return on investment than NextNav Warrant. However, FTAC Emerald is 5.58 times more volatile than NextNav Warrant. It trades about 0.35 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.36 per unit of risk. If you would invest 17.00 in FTAC Emerald Acquisition on September 3, 2024 and sell it today you would earn a total of 53.00 from holding FTAC Emerald Acquisition or generate 311.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAC Emerald Acquisition vs. NextNav Warrant
Performance |
| Timeline |
| FTAC Emerald Acquisition |
| NextNav Warrant |
FTAC Emerald and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAC Emerald and NextNav Warrant
The main advantage of trading using opposite FTAC Emerald and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAC Emerald position performs unexpectedly, NextNav Warrant 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 Warrant will offset losses from the drop in NextNav Warrant's long position.| FTAC Emerald vs. Distoken Acquisition | FTAC Emerald vs. Voyager Acquisition Corp | FTAC Emerald vs. dMY Squared Technology | FTAC Emerald vs. YHN Acquisition I |
| NextNav Warrant vs. HUMANA INC | NextNav Warrant vs. Aquagold International | NextNav Warrant vs. Barloworld Ltd ADR | NextNav Warrant vs. Morningstar Unconstrained Allocation |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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