Correlation Between Nextnav Acquisition and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Shoals 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 Shoals 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 Shoals Technologies Group, you can compare the effects of market volatilities on Nextnav Acquisition and Shoals 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 Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Shoals Technologies.
Diversification Opportunities for Nextnav Acquisition and Shoals Technologies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextnav and Shoals is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals 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 Shoals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoals Technologies has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Shoals Technologies go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Shoals Technologies
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.63 times more return on investment than Shoals Technologies. However, Nextnav Acquisition Corp is 1.58 times less risky than Shoals Technologies. It trades about 0.44 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about -0.01 per unit of risk. If you would invest 1,145 in Nextnav Acquisition Corp on August 28, 2024 and sell it today you would earn a total of 469.00 from holding Nextnav Acquisition Corp or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Shoals Technologies Group
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Shoals Technologies |
Nextnav Acquisition and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Shoals Technologies
The main advantage of trading using opposite Nextnav Acquisition and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Shoals 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 Shoals Technologies will offset losses from the drop in Shoals Technologies' long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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