Correlation Between Nextnav Acquisition and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Nextnav Acquisition and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and PennantPark Floating.
Diversification Opportunities for Nextnav Acquisition and PennantPark Floating
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextnav and PennantPark is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and PennantPark Floating go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and PennantPark Floating
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 5.25 times more return on investment than PennantPark Floating. However, Nextnav Acquisition is 5.25 times more volatile than PennantPark Floating Rate. It trades about 0.12 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.07 per unit of risk. If you would invest 386.00 in Nextnav Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 1,328 from holding Nextnav Acquisition Corp or generate 344.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. PennantPark Floating Rate
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| PennantPark Floating Rate |
Nextnav Acquisition and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and PennantPark Floating
The main advantage of trading using opposite Nextnav Acquisition and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital | PennantPark Floating vs. Gladstone Capital | PennantPark Floating vs. Main Street Capital |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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