Correlation Between Nextnav Acquisition and Semtech
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Semtech 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 Semtech 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 Semtech, you can compare the effects of market volatilities on Nextnav Acquisition and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Semtech.
Diversification Opportunities for Nextnav Acquisition and Semtech
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextnav and Semtech is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Semtech go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Semtech
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.98 times more return on investment than Semtech. However, Nextnav Acquisition Corp is 1.03 times less risky than Semtech. It trades about 0.44 of its potential returns per unit of risk. Semtech is currently generating about 0.22 per unit of risk. If you would invest 1,145 in Nextnav Acquisition Corp on August 27, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. Semtech
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Semtech |
Nextnav Acquisition and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Semtech
The main advantage of trading using opposite Nextnav Acquisition and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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