Correlation Between SES AI and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both SES AI 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 SES AI and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SES AI Corp and NextNav Warrant, you can compare the effects of market volatilities on SES AI 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 SES AI with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of SES AI and NextNav Warrant.
Diversification Opportunities for SES AI and NextNav Warrant
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SES and NextNav is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SES AI Corp and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and SES AI 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 SES AI Corp 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 SES AI i.e., SES AI and NextNav Warrant go up and down completely randomly.
Pair Corralation between SES AI and NextNav Warrant
Considering the 90-day investment horizon SES AI Corp is expected to under-perform the NextNav Warrant. In addition to that, SES AI is 1.03 times more volatile than NextNav Warrant. It trades about -0.05 of its total potential returns per unit of risk. NextNav Warrant is currently generating about 0.14 per unit of volatility. If you would invest 70.00 in NextNav Warrant on August 31, 2024 and sell it today you would earn a total of 607.00 from holding NextNav Warrant or generate 867.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 93.58% |
| Values | Daily Returns |
SES AI Corp vs. NextNav Warrant
Performance |
| Timeline |
| SES AI Corp |
| NextNav Warrant |
SES AI and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SES AI and NextNav Warrant
The main advantage of trading using opposite SES AI and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SES AI 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.| SES AI vs. Cooper Stnd | SES AI vs. Motorcar Parts of | SES AI vs. American Axle Manufacturing | SES AI vs. Stoneridge |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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