Correlation Between NextNav Warrant and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and ESGEN Acquisition 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 Warrant and ESGEN Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextNav Warrant and ESGEN Acquisition Corp, you can compare the effects of market volatilities on NextNav Warrant and ESGEN Acquisition 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 Warrant with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and ESGEN Acquisition.
Diversification Opportunities for NextNav Warrant and ESGEN Acquisition
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NextNav and ESGEN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and ESGEN Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGEN Acquisition Corp and NextNav Warrant 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 Warrant are associated (or correlated) with ESGEN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGEN Acquisition Corp has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between NextNav Warrant and ESGEN Acquisition
If you would invest 633.00 in NextNav Warrant on September 12, 2024 and sell it today you would earn a total of 29.00 from holding NextNav Warrant or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
NextNav Warrant vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| NextNav Warrant |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NextNav Warrant and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextNav Warrant and ESGEN Acquisition
The main advantage of trading using opposite NextNav Warrant and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, ESGEN Acquisition 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 ESGEN Acquisition will offset losses from the drop in ESGEN Acquisition's long position.| NextNav Warrant vs. HUMANA INC | NextNav Warrant vs. Barloworld Ltd ADR | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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