Correlation Between Pagaya Technologies and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Pagaya Technologies and Nextnav 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 Pagaya Technologies and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pagaya Technologies and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Pagaya Technologies and Nextnav 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 Pagaya Technologies with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pagaya Technologies and Nextnav Acquisition.
Diversification Opportunities for Pagaya Technologies and Nextnav Acquisition
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pagaya and Nextnav is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pagaya Technologies and Nextnav Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextnav Acquisition Corp and Pagaya Technologies 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 Pagaya Technologies are associated (or correlated) with Nextnav Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextnav Acquisition Corp has no effect on the direction of Pagaya Technologies i.e., Pagaya Technologies and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Pagaya Technologies and Nextnav Acquisition
Considering the 90-day investment horizon Pagaya Technologies is expected to generate 2.15 times less return on investment than Nextnav Acquisition. In addition to that, Pagaya Technologies is 2.77 times more volatile than Nextnav Acquisition Corp. It trades about 0.07 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.41 per unit of volatility. If you would invest 1,287 in Nextnav Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 452.00 from holding Nextnav Acquisition Corp or generate 35.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pagaya Technologies vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| Pagaya Technologies |
| Nextnav Acquisition Corp |
Pagaya Technologies and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pagaya Technologies and Nextnav Acquisition
The main advantage of trading using opposite Pagaya Technologies and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pagaya Technologies position performs unexpectedly, Nextnav 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 Nextnav Acquisition will offset losses from the drop in Nextnav Acquisition's long position.| Pagaya Technologies vs. Alarum Technologies | Pagaya Technologies vs. Arqit Quantum | Pagaya Technologies vs. Nutanix | Pagaya Technologies vs. Palo Alto Networks |
| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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