Correlation Between Nextnav Acquisition and Fulcrum Therapeutics

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

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

Diversification Opportunities for Nextnav Acquisition and Fulcrum Therapeutics

0.0

Correlation Coefficient

Nextnav Acquisition  Fulcrum Therapeutics

Pay attention - limited upside

The 3 months correlation between Nextnav and Fulcrum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Fulcrum Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Therapeutics and Nextnav Acquisition 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 Nextnav Acquisition Corp are associated (or correlated) with Fulcrum Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Therapeutics has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Fulcrum Therapeutics go up and down completely randomly.

Pair Corralation between Nextnav Acquisition and Fulcrum Therapeutics

If you would invest  772.00  in Nextnav Acquisition Corp on October 7, 2024 and sell it today you would earn a total of  839.00  from holding Nextnav Acquisition Corp or generate 108.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Nextnav Acquisition Corp  vs.  Fulcrum Therapeutics

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 weak basic indicators, Nextnav Acquisition displayed solid returns over the last few months and may actually be approaching a breakup point.

Fulcrum Therapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Therapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Fulcrum Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextnav Acquisition and Fulcrum Therapeutics

The main advantage of trading using opposite Nextnav Acquisition and Fulcrum Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextnav Acquisition position performs unexpectedly, Fulcrum Therapeutics 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 Fulcrum Therapeutics will offset losses from the drop in Fulcrum Therapeutics' long position.

The idea behind Nextnav Acquisition Corp and Fulcrum Therapeutics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.