Correlation Between NWTN Warrant and NWTN
Can any of the company-specific risk be diversified away by investing in both NWTN Warrant and NWTN 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 NWTN Warrant and NWTN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NWTN Warrant and NWTN Class B, you can compare the effects of market volatilities on NWTN Warrant and NWTN 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 NWTN Warrant with a short position of NWTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NWTN Warrant and NWTN.
Diversification Opportunities for NWTN Warrant and NWTN
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NWTN and NWTN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NWTN Warrant and NWTN Class B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NWTN Class B and NWTN 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 NWTN Warrant are associated (or correlated) with NWTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NWTN Class B has no effect on the direction of NWTN Warrant i.e., NWTN Warrant and NWTN go up and down completely randomly.
Pair Corralation between NWTN Warrant and NWTN
Assuming the 90 days horizon NWTN Warrant is expected to under-perform the NWTN. In addition to that, NWTN Warrant is 1.2 times more volatile than NWTN Class B. It trades about -0.1 of its total potential returns per unit of risk. NWTN Class B is currently generating about -0.06 per unit of volatility. If you would invest 49.00 in NWTN Class B on January 9, 2025 and sell it today you would lose (10.00) from holding NWTN Class B or give up 20.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NWTN Warrant vs. NWTN Class B
Performance |
| Timeline |
| NWTN Warrant |
| NWTN Class B |
NWTN Warrant and NWTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NWTN Warrant and NWTN
The main advantage of trading using opposite NWTN Warrant and NWTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NWTN Warrant position performs unexpectedly, NWTN 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 NWTN will offset losses from the drop in NWTN's long position.| NWTN Warrant vs. Monro Muffler Brake | NWTN Warrant vs. Magna International | NWTN Warrant vs. BorgWarner | NWTN Warrant vs. Mobileye Global Class |
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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