Correlation Between NextNav Warrant and 83001WAC8

Can any of the company-specific risk be diversified away by investing in both NextNav Warrant and 83001WAC8 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 83001WAC8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NextNav Warrant and Six Flags Theme, you can compare the effects of market volatilities on NextNav Warrant and 83001WAC8 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 83001WAC8. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextNav Warrant and 83001WAC8.

Diversification Opportunities for NextNav Warrant and 83001WAC8

0.03

Correlation Coefficient

NextNav Warrant  83001WAC8

Significant diversification

The 3 months correlation between NextNav and 83001WAC8 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NextNav Warrant and Six Flags Theme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Theme 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 83001WAC8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Theme has no effect on the direction of NextNav Warrant i.e., NextNav Warrant and 83001WAC8 go up and down completely randomly.

Pair Corralation between NextNav Warrant and 83001WAC8

Assuming the 90 days horizon NextNav Warrant is expected to generate 25.4 times more return on investment than 83001WAC8. However, NextNav Warrant is 25.4 times more volatile than Six Flags Theme. It trades about 0.23 of its potential returns per unit of risk. Six Flags Theme is currently generating about -0.02 per unit of risk. If you would invest  292.00  in NextNav Warrant on September 27, 2024 and sell it today you would earn a total of  265.00  from holding NextNav Warrant or generate 90.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.86%
Values	Daily Returns

NextNav Warrant  vs.  Six Flags Theme

NextNav Warrant

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 18 (%) 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.

Six Flags Theme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Six Flags Theme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 83001WAC8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NextNav Warrant and 83001WAC8

The main advantage of trading using opposite NextNav Warrant and 83001WAC8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextNav Warrant position performs unexpectedly, 83001WAC8 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 83001WAC8 will offset losses from the drop in 83001WAC8's long position.

The idea behind NextNav Warrant and Six Flags Theme 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .