Correlation Between Nextnav Acquisition and Verint Systems
Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Verint Systems 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 Verint Systems 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 Verint Systems, you can compare the effects of market volatilities on Nextnav Acquisition and Verint Systems 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 Verint Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Verint Systems.
Diversification Opportunities for Nextnav Acquisition and Verint Systems
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextnav and Verint is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Verint Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verint Systems 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 Verint Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verint Systems has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Verint Systems go up and down completely randomly.
Pair Corralation between Nextnav Acquisition and Verint Systems
Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 1.82 times more return on investment than Verint Systems. However, Nextnav Acquisition is 1.82 times more volatile than Verint Systems. It trades about 0.09 of its potential returns per unit of risk. Verint Systems is currently generating about -0.02 per unit of risk. If you would invest 297.00 in Nextnav Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 1,290 from holding Nextnav Acquisition Corp or generate 434.34% 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. Verint Systems
Performance |
| Timeline |
| Nextnav Acquisition Corp |
| Verint Systems |
Nextnav Acquisition and Verint Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextnav Acquisition and Verint Systems
The main advantage of trading using opposite Nextnav Acquisition and Verint Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Verint Systems 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 Verint Systems will offset losses from the drop in Verint Systems' 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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