Correlation Between Nextnav Acquisition and Global Lights
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Global Lights 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 Global Lights 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 Global Lights Acquisition, you can compare the effects of market volatilities on Nextnav Acquisition and Global Lights 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 Global Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Global Lights.
Diversification Opportunities for Nextnav Acquisition and Global Lights
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nextnav and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Global Lights Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lights Acquisition 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 Global Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lights Acquisition has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Global Lights go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Global Lights
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 12.9 times more return on investment than Global Lights. However, Nextnav Acquisition is 12.9 times more volatile than Global Lights Acquisition. It trades about 0.1 of its potential returns per unit of risk. Global Lights Acquisition is currently generating about 0.06 per unit of risk. If you would invest 276.00 in Nextnav Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 1,397 from holding Nextnav Acquisition Corp or generate 506.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 53.13% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Global Lights Acquisition
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Global Lights Acquisition |
Nextnav Acquisition and Global Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Global Lights
The main advantage of trading using opposite Nextnav Acquisition and Global Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Global Lights 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 Global Lights will offset losses from the drop in Global Lights' long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Global Lights vs. Vera Bradley | Global Lights vs. Southwest Airlines | Global Lights vs. Inter Parfums | Global Lights vs. Timken Company |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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