Correlation Between Nextnav Acquisition and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Nextnav Acquisition and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Centessa Pharmaceuticals.
Diversification Opportunities for Nextnav Acquisition and Centessa Pharmaceuticals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextnav and Centessa is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Centessa Pharmaceuticals
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.87 times more return on investment than Centessa Pharmaceuticals. However, Nextnav Acquisition Corp is 1.16 times less risky than Centessa Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.03 per unit of risk. If you would invest 1,489 in Nextnav Acquisition Corp on September 13, 2024 and sell it today you would earn a total of 233.50 from holding Nextnav Acquisition Corp or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Centessa Pharmaceuticals |
Nextnav Acquisition and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Centessa Pharmaceuticals
The main advantage of trading using opposite Nextnav Acquisition and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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