Correlation Between Xunlei and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Xunlei 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 Xunlei and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xunlei Ltd Adr and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Xunlei 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 Xunlei with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Nextnav Acquisition.
Diversification Opportunities for Xunlei and Nextnav Acquisition
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xunlei and Nextnav is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr 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 Xunlei 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 Xunlei Ltd Adr 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 Xunlei i.e., Xunlei and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Xunlei and Nextnav Acquisition
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to under-perform the Nextnav Acquisition. In addition to that, Xunlei is 1.01 times more volatile than Nextnav Acquisition Corp. It trades about -0.07 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.41 per unit of volatility. If you would invest 1,182 in Nextnav Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 491.00 from holding Nextnav Acquisition Corp or generate 41.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Nextnav Acquisition Corp |
Xunlei and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Nextnav Acquisition
The main advantage of trading using opposite Xunlei and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei 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.| Xunlei vs. Alarum Technologies | Xunlei vs. Nutanix | Xunlei vs. Palo Alto Networks | Xunlei vs. GigaCloud Technology Class |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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