Correlation Between Nextnav Acquisition and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Shake Shack 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 Shake Shack 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 Shake Shack, you can compare the effects of market volatilities on Nextnav Acquisition and Shake Shack 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 Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Shake Shack.
Diversification Opportunities for Nextnav Acquisition and Shake Shack
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nextnav and Shake is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack 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 Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Shake Shack go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Shake Shack
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 1.72 times more return on investment than Shake Shack. However, Nextnav Acquisition is 1.72 times more volatile than Shake Shack. It trades about 0.1 of its potential returns per unit of risk. Shake Shack is currently generating about 0.09 per unit of risk. If you would invest 286.00 in Nextnav Acquisition Corp on September 5, 2024 and sell it today you would earn a total of 1,348 from holding Nextnav Acquisition Corp or generate 471.33% 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. Shake Shack
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Shake Shack |
Nextnav Acquisition and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Shake Shack
The main advantage of trading using opposite Nextnav Acquisition and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Shake Shack 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 Shake Shack will offset losses from the drop in Shake Shack's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Shake Shack vs. Hyatt Hotels | Shake Shack vs. Smart Share Global | Shake Shack vs. Wyndham Hotels Resorts | Shake Shack vs. WW International |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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