Correlation Between NextNav Warrant and Canada Goose

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Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and Canada Goose 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 Canada Goose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextNav Warrant and Canada Goose Holdings, you can compare the effects of market volatilities on NextNav Warrant and Canada Goose 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 Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and Canada Goose.

Diversification Opportunities for NextNav Warrant and Canada Goose

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between NextNav and Canada is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings 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 Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and Canada Goose go up and down completely randomly.

Pair Corralation between NextNav Warrant and Canada Goose

Assuming the 90 days horizon NextNav Warrant is expected to generate 1.92 times more return on investment than Canada Goose. However, NextNav Warrant is 1.92 times more volatile than Canada Goose Holdings. It trades about 0.13 of its potential returns per unit of risk. Canada Goose Holdings is currently generating about -0.02 per unit of risk. If you would invest  42.00  in NextNav Warrant on September 23, 2024 and sell it today you would earn a total of  528.00  from holding NextNav Warrant or generate 1257.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy90.54%
ValuesDaily Returns

NextNav Warrant  vs.  Canada Goose Holdings

 Performance 
       Timeline  
NextNav Warrant 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, NextNav Warrant showed solid returns over the last few months and may actually be approaching a breakup point.
Canada Goose Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

NextNav Warrant and Canada Goose Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NextNav Warrant and Canada Goose

The main advantage of trading using opposite NextNav Warrant and Canada Goose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, Canada Goose 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 Canada Goose will offset losses from the drop in Canada Goose's long position.
The idea behind NextNav Warrant and Canada Goose Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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