Correlation Between Nextnav Acquisition and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Nextnav Acquisition and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Pekin Life.
Diversification Opportunities for Nextnav Acquisition and Pekin Life
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextnav and Pekin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Pekin Life go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Pekin Life
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 2.65 times more return on investment than Pekin Life. However, Nextnav Acquisition is 2.65 times more volatile than Pekin Life Insurance. It trades about 0.13 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.01 per unit of risk. If you would invest 218.00 in Nextnav Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 1,455 from holding Nextnav Acquisition Corp or generate 667.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Pekin Life Insurance
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Pekin Life Insurance |
Nextnav Acquisition and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Pekin Life
The main advantage of trading using opposite Nextnav Acquisition and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Pekin Life vs. HUMANA INC | Pekin Life vs. SCOR PK | Pekin Life vs. Aquagold International | Pekin Life vs. Thrivent High Yield |
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.
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