Correlation Between Nextnav Acquisition and Check Point
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Nextnav Acquisition and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Check Point.
Diversification Opportunities for Nextnav Acquisition and Check Point
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextnav and Check is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Check Point go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Check Point
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 1.17 times more return on investment than Check Point. However, Nextnav Acquisition is 1.17 times more volatile than Check Point Software. It trades about 0.41 of its potential returns per unit of risk. Check Point Software is currently generating about -0.17 per unit of risk. If you would invest 1,145 in Nextnav Acquisition Corp on August 27, 2024 and sell it today you would earn a total of 442.00 from holding Nextnav Acquisition Corp or generate 38.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Check Point Software
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Check Point Software |
Nextnav Acquisition and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Check Point
The main advantage of trading using opposite Nextnav Acquisition and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Nextnav Acquisition vs. GigaCloud Technology Class | Nextnav Acquisition vs. Arqit Quantum | Nextnav Acquisition vs. Telos Corp | Nextnav Acquisition vs. Cemtrex |
| Check Point vs. GigaCloud Technology Class | Check Point vs. Arqit Quantum | Check Point vs. Cemtrex | Check Point vs. Rapid7 Inc |
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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