Correlation Between Nextnav Acquisition and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on Nextnav Acquisition and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Kaiser Aluminum.
Diversification Opportunities for Nextnav Acquisition and Kaiser Aluminum
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nextnav and Kaiser is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Kaiser Aluminum
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 1.94 times more return on investment than Kaiser Aluminum. However, Nextnav Acquisition is 1.94 times more volatile than Kaiser Aluminum. It trades about 0.14 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.07 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. Kaiser Aluminum
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Kaiser Aluminum |
Nextnav Acquisition and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Kaiser Aluminum
The main advantage of trading using opposite Nextnav Acquisition and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum'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 |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |