Correlation Between Nextnav Acquisition and Telos Corp

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

Diversification Opportunities for Nextnav Acquisition and Telos Corp

0.65

Correlation Coefficient

Nextnav Acquisition  Telos Corp

Poor diversification

The 3 months correlation between Nextnav and Telos is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nextnav Acquisition Corp and Telos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telos Corp 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 Telos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telos Corp has no effect on the direction of Nextnav Acquisition i.e., Nextnav Acquisition and Telos Corp go up and down completely randomly.

Pair Corralation between Nextnav Acquisition and Telos Corp

Allowing for the 90-day total investment horizon Nextnav Acquisition Corp is expected to under-perform the Telos Corp. But the stock apears to be less risky and, when comparing its historical volatility, Nextnav Acquisition Corp is 1.2 times less risky than Telos Corp. The stock trades about -0.25 of its potential returns per unit of risk. The Telos Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  293.00  in Telos Corp on December 5, 2024 and sell it today you would earn a total of  0.00  from holding Telos Corp or generate 0.0% return on investment over 90 days.

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

Nextnav Acquisition Corp  vs.  Telos Corp

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.

Telos Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nextnav Acquisition and Telos Corp

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

The idea behind Nextnav Acquisition Corp and Telos 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.