Correlation Between Weibo Corp and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Nextnav Acquisition.
Diversification Opportunities for Weibo Corp and Nextnav Acquisition
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weibo and Nextnav is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp 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 Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Weibo Corp and Nextnav Acquisition
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the Nextnav Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.55 times less risky than Nextnav Acquisition. The stock trades about -0.01 of its potential returns per unit of risk. The Nextnav Acquisition Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Nextnav Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 1,454 from holding Nextnav Acquisition Corp or generate 510.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| Weibo Corp |
| Nextnav Acquisition Corp |
Weibo Corp and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Nextnav Acquisition
The main advantage of trading using opposite Weibo Corp and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| Nextnav Acquisition vs. Palo Alto Networks | Nextnav Acquisition vs. GigaCloud Technology Class | Nextnav Acquisition vs. Pagaya Technologies | Nextnav Acquisition vs. Telos Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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