Correlation Between Canada Goose and NextNav Warrant

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

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

Diversification Opportunities for Canada Goose and NextNav Warrant

0.06

Correlation Coefficient

Canada Goose  NextNav Warrant

Significant diversification

The 3 months correlation between Canada and NextNav is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and Canada Goose 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 Canada Goose Holdings 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 Canada Goose i.e., Canada Goose and NextNav Warrant go up and down completely randomly.

Pair Corralation between Canada Goose and NextNav Warrant

Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the NextNav Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Canada Goose Holdings is 2.43 times less risky than NextNav Warrant. The stock trades about -0.07 of its potential returns per unit of risk. The NextNav Warrant is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  638.00  in NextNav Warrant on December 26, 2024 and sell it today you would lose (118.00) from holding NextNav Warrant or give up 18.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Canada Goose Holdings  vs.  NextNav Warrant

Canada Goose Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 fairly stable basic indicators, NextNav Warrant is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Canada Goose and NextNav Warrant

The main advantage of trading using opposite Canada Goose and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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 Canada Goose Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.