Correlation Between Nextnav Acquisition and JetBlue Airways
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and JetBlue Airways 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 JetBlue Airways 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 JetBlue Airways Corp, you can compare the effects of market volatilities on Nextnav Acquisition and JetBlue Airways 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 JetBlue Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and JetBlue Airways.
Diversification Opportunities for Nextnav Acquisition and JetBlue Airways
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nextnav and JetBlue is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and JetBlue Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetBlue Airways Corp 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 JetBlue Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetBlue Airways Corp has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and JetBlue Airways go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and JetBlue Airways
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 1.01 times more return on investment than JetBlue Airways. However, Nextnav Acquisition is 1.01 times more volatile than JetBlue Airways Corp. It trades about 0.43 of its potential returns per unit of risk. JetBlue Airways Corp is currently generating about 0.09 per unit of risk. If you would invest 1,181 in Nextnav Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 492.00 from holding Nextnav Acquisition Corp or generate 41.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. JetBlue Airways Corp
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| JetBlue Airways Corp |
Nextnav Acquisition and JetBlue Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and JetBlue Airways
The main advantage of trading using opposite Nextnav Acquisition and JetBlue Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, JetBlue Airways 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 JetBlue Airways will offset losses from the drop in JetBlue Airways' long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| JetBlue Airways vs. Frontier Group Holdings | JetBlue Airways vs. Southwest Airlines | JetBlue Airways vs. United Airlines Holdings | JetBlue Airways vs. American Airlines Group |
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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