Correlation Between Nextnav Acquisition and Nutanix

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

Diversification Opportunities for Nextnav Acquisition and Nutanix

-0.6

Correlation Coefficient

Nextnav Acquisition  Nutanix

Excellent diversification

The 3 months correlation between Nextnav and Nutanix is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix 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 Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Nutanix go up and down completely randomly.

Pair Corralation between Nextnav Acquisition and Nutanix

Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to under-perform the Nutanix. In addition to that, Nextnav Acquisition is 1.88 times more volatile than Nutanix. It trades about -0.05 of its total potential returns per unit of risk. Nutanix is currently generating about 0.1 per unit of volatility. If you would invest  6,157  in Nutanix on December 29, 2024 and sell it today you would earn a total of  1,039  from holding Nutanix or generate 16.88% return on investment over 90 days.

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

Nextnav Acquisition Corp  vs.  Nutanix

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.

Nutanix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nutanix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextnav Acquisition and Nutanix

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

The idea behind Nextnav Acquisition Corp and Nutanix 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.