Correlation Between Paysafe and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both Paysafe and NextNav Warrant 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 Paysafe and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe and NextNav Warrant, you can compare the effects of market volatilities on Paysafe and NextNav Warrant 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 Paysafe with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and NextNav Warrant.
Diversification Opportunities for Paysafe and NextNav Warrant
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Paysafe and NextNav is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and Paysafe 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 Paysafe are associated (or correlated) with NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of Paysafe i.e., Paysafe and NextNav Warrant go up and down completely randomly.
Pair Corralation between Paysafe and NextNav Warrant
Given the investment horizon of 90 days Paysafe is expected to generate 5.95 times less return on investment than NextNav Warrant. But when comparing it to its historical volatility, Paysafe is 1.5 times less risky than NextNav Warrant. It trades about 0.03 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 72.00 in NextNav Warrant on August 29, 2024 and sell it today you would earn a total of 588.00 from holding NextNav Warrant or generate 816.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.52% |
| Values | Daily Returns |
Paysafe vs. NextNav Warrant
Performance |
| Timeline |
| Paysafe |
| NextNav Warrant |
Paysafe and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and NextNav Warrant
The main advantage of trading using opposite Paysafe and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, NextNav Warrant 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 Warrant will offset losses from the drop in NextNav Warrant's long position.| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |