Correlation Between NextNav Warrant and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and Highway Holdings 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 Highway Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextNav Warrant and Highway Holdings Limited, you can compare the effects of market volatilities on NextNav Warrant and Highway Holdings 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 Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and Highway Holdings.
Diversification Opportunities for NextNav Warrant and Highway Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NextNav and Highway is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings 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 Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and Highway Holdings go up and down completely randomly.
Pair Corralation between NextNav Warrant and Highway Holdings
Assuming the 90 days horizon NextNav Warrant is expected to generate 4.15 times more return on investment than Highway Holdings. However, NextNav Warrant is 4.15 times more volatile than Highway Holdings Limited. It trades about 0.36 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.16 per unit of risk. If you would invest 489.00 in NextNav Warrant on September 3, 2024 and sell it today you would earn a total of 188.00 from holding NextNav Warrant or generate 38.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextNav Warrant vs. Highway Holdings Limited
Performance |
| Timeline |
| NextNav Warrant |
| Highway Holdings |
NextNav Warrant and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextNav Warrant and Highway Holdings
The main advantage of trading using opposite NextNav Warrant and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| NextNav Warrant vs. HUMANA INC | NextNav Warrant vs. Aquagold International | NextNav Warrant vs. Barloworld Ltd ADR | NextNav Warrant vs. Morningstar Unconstrained Allocation |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. SCOR PK | Highway Holdings vs. HUMANA INC | Highway Holdings vs. Aquagold International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |