Correlation Between Marqeta and Nextnav Acquisition

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

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

Diversification Opportunities for Marqeta and Nextnav Acquisition

-0.29

Correlation Coefficient

Marqeta  Nextnav Acquisition

Very good diversification

The 3 months correlation between Marqeta and Nextnav is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta 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 Marqeta 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 Marqeta 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 Marqeta i.e., Marqeta and Nextnav Acquisition go up and down completely randomly.

Pair Corralation between Marqeta and Nextnav Acquisition

Allowing for the 90-day total investment horizon Marqeta is expected to generate 0.65 times more return on investment than Nextnav Acquisition. However, Marqeta is 1.54 times less risky than Nextnav Acquisition. It trades about 0.09 of its potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about -0.05 per unit of risk. If you would invest  377.00  in Marqeta on December 28, 2024 and sell it today you would earn a total of  62.00  from holding Marqeta or generate 16.45% return on investment over 90 days.

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

Marqeta  vs.  Nextnav Acquisition Corp

Marqeta

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marqeta are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Marqeta reported solid returns over the last few months and may actually be approaching a breakup point.

Nextnav Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextnav Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Marqeta and Nextnav Acquisition

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

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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.