Correlation Between Nextnav Acquisition and EMCOR
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and EMCOR 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 EMCOR 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 EMCOR Group, you can compare the effects of market volatilities on Nextnav Acquisition and EMCOR 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 EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and EMCOR.
Diversification Opportunities for Nextnav Acquisition and EMCOR
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nextnav and EMCOR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group 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 EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and EMCOR go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and EMCOR
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 2.61 times more return on investment than EMCOR. However, Nextnav Acquisition is 2.61 times more volatile than EMCOR Group. It trades about 0.14 of its potential returns per unit of risk. EMCOR Group is currently generating about 0.19 per unit of risk. If you would invest 394.00 in Nextnav Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 1,345 from holding Nextnav Acquisition Corp or generate 341.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. EMCOR Group
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| EMCOR Group |
Nextnav Acquisition and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and EMCOR
The main advantage of trading using opposite Nextnav Acquisition and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| Nextnav Acquisition vs. Palo Alto Networks | Nextnav Acquisition vs. GigaCloud Technology Class | Nextnav Acquisition vs. Pagaya Technologies | Nextnav Acquisition vs. Telos Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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