Correlation Between Western Asset and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and NextNav Warrant, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and NextNav Warrant.
Diversification Opportunities for Western Asset and NextNav Warrant
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and NextNav is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and Western Asset 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 Western Asset Investment 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 Western Asset i.e., Western Asset and NextNav Warrant go up and down completely randomly.
Pair Corralation between Western Asset and NextNav Warrant
Considering the 90-day investment horizon Western Asset is expected to generate 471.33 times less return on investment than NextNav Warrant. But when comparing it to its historical volatility, Western Asset Investment is 9.91 times less risky than NextNav Warrant. It trades about 0.01 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 468.00 in NextNav Warrant on September 2, 2024 and sell it today you would earn a total of 209.00 from holding NextNav Warrant or generate 44.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. NextNav Warrant
Performance |
| Timeline |
| Western Asset Investment |
| NextNav Warrant |
Western Asset and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and NextNav Warrant
The main advantage of trading using opposite Western Asset and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
| NextNav Warrant vs. Aquagold International | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield | NextNav Warrant vs. Via Renewables |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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