Correlation Between Nextnav Acquisition and United Homes
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and United Homes 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 United Homes 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 United Homes Group, you can compare the effects of market volatilities on Nextnav Acquisition and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and United Homes.
Diversification Opportunities for Nextnav Acquisition and United Homes
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextnav and United is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and United Homes go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and United Homes
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.91 times more return on investment than United Homes. However, Nextnav Acquisition Corp is 1.1 times less risky than United Homes. It trades about 0.51 of its potential returns per unit of risk. United Homes Group is currently generating about 0.21 per unit of risk. If you would invest 1,162 in Nextnav Acquisition Corp on September 1, 2024 and sell it today you would earn a total of 577.00 from holding Nextnav Acquisition Corp or generate 49.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextnav Acquisition Corp vs. United Homes Group
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| United Homes Group |
Nextnav Acquisition and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and United Homes
The main advantage of trading using opposite Nextnav Acquisition and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.| Nextnav Acquisition vs. Palo Alto Networks | Nextnav Acquisition vs. GigaCloud Technology Class | Nextnav Acquisition vs. Pagaya Technologies | Nextnav Acquisition vs. Telos Corp |
| United Homes vs. AmTrust Financial Services | United Homes vs. Artisan Partners Asset | United Homes vs. Marine Products | United Homes vs. Juniata Valley Financial |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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