Correlation Between Wejo and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Wejo 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 Wejo and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wejo Group and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Wejo 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 Wejo with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wejo and Nextnav Acquisition.
Diversification Opportunities for Wejo and Nextnav Acquisition
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wejo and Nextnav is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Wejo Group 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 Wejo 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 Wejo Group 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 Wejo i.e., Wejo and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Wejo and Nextnav Acquisition
If you would invest 767.00 in Nextnav Acquisition Corp on August 28, 2024 and sell it today you would earn a total of 847.00 from holding Nextnav Acquisition Corp or generate 110.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Wejo Group vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| Wejo Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nextnav Acquisition Corp |
Wejo and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wejo and Nextnav Acquisition
The main advantage of trading using opposite Wejo and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wejo 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 Wejo Group 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. GigaCloud Technology Class | Nextnav Acquisition vs. Telos Corp | Nextnav Acquisition vs. Cemtrex | Nextnav Acquisition vs. authID Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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