Correlation Between NextNav Warrant and UL Solutions
Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and UL Solutions 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 UL Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextNav Warrant and UL Solutions, you can compare the effects of market volatilities on NextNav Warrant and UL Solutions 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 UL Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and UL Solutions.
Diversification Opportunities for NextNav Warrant and UL Solutions
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NextNav and ULS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and UL Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UL Solutions 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 UL Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UL Solutions has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and UL Solutions go up and down completely randomly.
Pair Corralation between NextNav Warrant and UL Solutions
Assuming the 90 days horizon NextNav Warrant is expected to generate 2.31 times more return on investment than UL Solutions. However, NextNav Warrant is 2.31 times more volatile than UL Solutions. It trades about 0.2 of its potential returns per unit of risk. UL Solutions is currently generating about 0.17 per unit of risk. If you would invest 99.00 in NextNav Warrant on September 1, 2024 and sell it today you would earn a total of 578.00 from holding NextNav Warrant or generate 583.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.1% |
| Values | Daily Returns |
NextNav Warrant vs. UL Solutions
Performance |
| Timeline |
| NextNav Warrant |
| UL Solutions |
NextNav Warrant and UL Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextNav Warrant and UL Solutions
The main advantage of trading using opposite NextNav Warrant and UL Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, UL Solutions 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 UL Solutions will offset losses from the drop in UL Solutions' long position.The idea behind NextNav Warrant and UL Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| UL Solutions vs. FormFactor | UL Solutions vs. Taiwan Semiconductor Manufacturing | UL Solutions vs. Arm Holdings plc | UL Solutions vs. Townsquare Media |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |