Correlation Between NextNav Warrant and Zhihu
Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and Zhihu 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 Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextNav Warrant and Zhihu Inc ADR, you can compare the effects of market volatilities on NextNav Warrant and Zhihu 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 Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and Zhihu.
Diversification Opportunities for NextNav Warrant and Zhihu
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NextNav and Zhihu is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and Zhihu go up and down completely randomly.
Pair Corralation between NextNav Warrant and Zhihu
Assuming the 90 days horizon NextNav Warrant is expected to generate 1.29 times more return on investment than Zhihu. However, NextNav Warrant is 1.29 times more volatile than Zhihu Inc ADR. It trades about 0.4 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.01 per unit of risk. If you would invest 429.00 in NextNav Warrant on August 28, 2024 and sell it today you would earn a total of 203.00 from holding NextNav Warrant or generate 47.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextNav Warrant vs. Zhihu Inc ADR
Performance |
| Timeline |
| NextNav Warrant |
| Zhihu Inc ADR |
NextNav Warrant and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextNav Warrant and Zhihu
The main advantage of trading using opposite NextNav Warrant and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| NextNav Warrant vs. Aquagold International | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield | NextNav Warrant vs. Via Renewables |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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