Correlation Between Nextnav Acquisition and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Cheesecake Factory 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 Nextnav Acquisition and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextnav Acquisition Corp and The Cheesecake Factory, you can compare the effects of market volatilities on Nextnav Acquisition and Cheesecake Factory 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 Nextnav Acquisition with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Cheesecake Factory.
Diversification Opportunities for Nextnav Acquisition and Cheesecake Factory
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nextnav and Cheesecake is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and The Cheesecake Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Cheesecake Factory and Nextnav Acquisition 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 Nextnav Acquisition Corp are associated (or correlated) with Cheesecake Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Cheesecake Factory has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Cheesecake Factory
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 2.25 times more return on investment than Cheesecake Factory. However, Nextnav Acquisition is 2.25 times more volatile than The Cheesecake Factory. It trades about 0.1 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.05 per unit of risk. If you would invest 286.00 in Nextnav Acquisition Corp on September 5, 2024 and sell it today you would earn a total of 1,348 from holding Nextnav Acquisition Corp or generate 471.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. The Cheesecake Factory
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| The Cheesecake Factory |
Nextnav Acquisition and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Cheesecake Factory
The main advantage of trading using opposite Nextnav Acquisition and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Cheesecake Factory 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 Cheesecake Factory will offset losses from the drop in Cheesecake Factory's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Cheesecake Factory vs. Hyatt Hotels | Cheesecake Factory vs. Smart Share Global | Cheesecake Factory vs. Wyndham Hotels Resorts | Cheesecake Factory vs. WW International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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