Correlation Between SOS and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both SOS 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 SOS and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOS Limited and Nextnav Acquisition Corp, you can compare the effects of market volatilities on SOS 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 SOS with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOS and Nextnav Acquisition.
Diversification Opportunities for SOS and Nextnav Acquisition
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOS and Nextnav is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SOS Limited 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 SOS 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 SOS Limited 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 SOS i.e., SOS and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between SOS and Nextnav Acquisition
Considering the 90-day investment horizon SOS Limited is expected to under-perform the Nextnav Acquisition. In addition to that, SOS is 2.19 times more volatile than Nextnav Acquisition Corp. It trades about -0.19 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.47 per unit of volatility. If you would invest 1,047 in Nextnav Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 540.00 from holding Nextnav Acquisition Corp or generate 51.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOS Limited vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| SOS Limited |
| Nextnav Acquisition Corp |
SOS and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOS and Nextnav Acquisition
The main advantage of trading using opposite SOS and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOS 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.The idea behind SOS Limited and Nextnav Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |