Correlation Between Nextnav Acquisition and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Palantir Technologies 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 Palantir Technologies 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 Palantir Technologies, you can compare the effects of market volatilities on Nextnav Acquisition and Palantir Technologies 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 Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Palantir Technologies.
Diversification Opportunities for Nextnav Acquisition and Palantir Technologies
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nextnav and Palantir is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies 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 Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Palantir Technologies go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Palantir Technologies
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.67 times more return on investment than Palantir Technologies. However, Nextnav Acquisition Corp is 1.49 times less risky than Palantir Technologies. It trades about 0.47 of its potential returns per unit of risk. Palantir Technologies is currently generating about 0.29 per unit of risk. If you would invest 1,047 in Nextnav Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 540.00 from holding Nextnav Acquisition Corp or generate 51.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Palantir Technologies
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Palantir Technologies |
Nextnav Acquisition and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Palantir Technologies
The main advantage of trading using opposite Nextnav Acquisition and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Palantir Technologies 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 Palantir Technologies will offset losses from the drop in Palantir Technologies' long position.| Nextnav Acquisition vs. GigaCloud Technology Class | Nextnav Acquisition vs. Arqit Quantum | Nextnav Acquisition vs. Telos Corp | Nextnav Acquisition vs. Cemtrex |
| Palantir Technologies vs. Palo Alto Networks | Palantir Technologies vs. Adobe Systems Incorporated | Palantir Technologies vs. Crowdstrike Holdings | Palantir Technologies vs. Block Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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