Correlation Between NextNav Warrant and SunOpta

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

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

Diversification Opportunities for NextNav Warrant and SunOpta

0.4

Correlation Coefficient

NextNav Warrant  SunOpta

Very weak diversification

The 3 months correlation between NextNav and SunOpta is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and SunOpta go up and down completely randomly.

Pair Corralation between NextNav Warrant and SunOpta

Assuming the 90 days horizon NextNav Warrant is expected to generate 2.87 times more return on investment than SunOpta. However, NextNav Warrant is 2.87 times more volatile than SunOpta. It trades about -0.02 of its potential returns per unit of risk. SunOpta is currently generating about -0.25 per unit of risk. If you would invest  642.00  in NextNav Warrant on December 29, 2024 and sell it today you would lose (162.00) from holding NextNav Warrant or give up 25.23% of portfolio value over 90 days.

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

NextNav Warrant  vs.  SunOpta

NextNav Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days NextNav Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

SunOpta

Risk-Adjusted Performance

Very Weak

Over the last 90 days SunOpta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with NextNav Warrant and SunOpta

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

The idea behind NextNav Warrant and SunOpta 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.