Correlation Between Nextnav Acquisition and Microsoft
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Nextnav Acquisition and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Microsoft.
Diversification Opportunities for Nextnav Acquisition and Microsoft
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nextnav and Microsoft is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Microsoft go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Microsoft
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 2.54 times more return on investment than Microsoft. However, Nextnav Acquisition is 2.54 times more volatile than Microsoft. It trades about 0.53 of its potential returns per unit of risk. Microsoft is currently generating about -0.04 per unit of risk. If you would invest 987.00 in Nextnav Acquisition Corp on August 25, 2024 and sell it today you would earn a total of 600.00 from holding Nextnav Acquisition Corp or generate 60.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Microsoft
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Microsoft |
Nextnav Acquisition and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Microsoft
The main advantage of trading using opposite Nextnav Acquisition and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |