Correlation Between Chimerix and NextNav Warrant

Can any of the company-specific risk be diversified away by investing in both Chimerix 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 Chimerix and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chimerix and NextNav Warrant, you can compare the effects of market volatilities on Chimerix 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 Chimerix with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and NextNav Warrant.

Diversification Opportunities for Chimerix and NextNav Warrant

-0.4

Correlation Coefficient

Chimerix  NextNav Warrant

Very good diversification

The 3 months correlation between Chimerix and NextNav is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and Chimerix 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 Chimerix 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 Chimerix i.e., Chimerix and NextNav Warrant go up and down completely randomly.

Pair Corralation between Chimerix and NextNav Warrant

Given the investment horizon of 90 days Chimerix is expected to generate 1.19 times more return on investment than NextNav Warrant. However, Chimerix is 1.19 times more volatile than NextNav Warrant. It trades about 0.19 of its potential returns per unit of risk. NextNav Warrant is currently generating about -0.02 per unit of risk. If you would invest  344.00  in Chimerix on December 30, 2024 and sell it today you would earn a total of  506.00  from holding Chimerix or generate 147.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chimerix  vs.  NextNav Warrant

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

NextNav Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days NextNav Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chimerix and NextNav Warrant

The main advantage of trading using opposite Chimerix and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimerix 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.

The idea behind Chimerix and NextNav Warrant 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.