Correlation Between NextNav Warrant and GobiMin

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

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

Diversification Opportunities for NextNav Warrant and GobiMin

0.2

Correlation Coefficient

NextNav Warrant  GobiMin

Modest diversification

The 3 months correlation between NextNav and GobiMin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin and NextNav Warrant 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 Warrant are associated (or correlated) with GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and GobiMin go up and down completely randomly.

Pair Corralation between NextNav Warrant and GobiMin

If you would invest  127.00  in GobiMin on October 12, 2024 and sell it today you would earn a total of  0.00  from holding GobiMin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

NextNav Warrant  vs.  GobiMin

NextNav Warrant

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NextNav Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

GobiMin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NextNav Warrant and GobiMin

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

The idea behind NextNav Warrant and GobiMin 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.