Correlation Between MariaDB Plc and Nextnav Acquisition

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

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

Diversification Opportunities for MariaDB Plc and Nextnav Acquisition

0.72

Correlation Coefficient

MariaDB Plc  Nextnav Acquisition

Poor diversification

The 3 months correlation between MariaDB and Nextnav is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MariaDB Plc 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 MariaDB Plc 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 MariaDB Plc 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 MariaDB Plc i.e., MariaDB Plc and Nextnav Acquisition go up and down completely randomly.

Pair Corralation between MariaDB Plc and Nextnav Acquisition

Given the investment horizon of 90 days MariaDB Plc is expected to under-perform the Nextnav Acquisition. In addition to that, MariaDB Plc is 1.96 times more volatile than Nextnav Acquisition Corp. It trades about -0.01 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.1 per unit of volatility. If you would invest  286.00  in Nextnav Acquisition Corp on October 6, 2024 and sell it today you would earn a total of  1,325  from holding Nextnav Acquisition Corp or generate 463.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	82.11%
Values	Daily Returns

MariaDB Plc  vs.  Nextnav Acquisition Corp

MariaDB Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MariaDB Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MariaDB Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Nextnav Acquisition Corp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nextnav Acquisition Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Nextnav Acquisition displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MariaDB Plc and Nextnav Acquisition

The main advantage of trading using opposite MariaDB Plc and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MariaDB Plc 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 MariaDB Plc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.