Correlation Between Nextnav Acquisition and Intrusion

Can any of the company-specific risk be diversified away by investing in both Nextnav Acquisition and Intrusion 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 Intrusion 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 Intrusion, you can compare the effects of market volatilities on Nextnav Acquisition and Intrusion 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 Intrusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextnav Acquisition and Intrusion.

Diversification Opportunities for Nextnav Acquisition and Intrusion

0.56

Correlation Coefficient

Nextnav Acquisition  Intrusion

Very weak diversification

The 3 months correlation between Nextnav and Intrusion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Intrusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrusion 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 Intrusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrusion has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Intrusion go up and down completely randomly.

Pair Corralation between Nextnav Acquisition and Intrusion

Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to generate 0.39 times more return on investment than Intrusion. However, Nextnav Acquisition Corp is 2.6 times less risky than Intrusion. It trades about -0.05 of its potential returns per unit of risk. Intrusion is currently generating about -0.11 per unit of risk. If you would invest  1,662  in Nextnav Acquisition Corp on December 30, 2024 and sell it today you would lose (371.00) from holding Nextnav Acquisition Corp or give up 22.32% of portfolio value over 90 days.

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

Nextnav Acquisition Corp  vs.  Intrusion

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.

Intrusion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intrusion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nextnav Acquisition and Intrusion

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

The idea behind Nextnav Acquisition Corp and Intrusion 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.