Correlation Between 7GC Co and NextNav Warrant

Can any of the company-specific risk be diversified away by investing in both 7GC Co and NextNav Warrant 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 7GC Co and NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 7GC Co Holdings and NextNav Warrant, you can compare the effects of market volatilities on 7GC Co and NextNav Warrant 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 7GC Co with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of 7GC Co and NextNav Warrant.

Diversification Opportunities for 7GC Co and NextNav Warrant

-0.44

Correlation Coefficient

7GC Co  NextNav Warrant

Very good diversification

The 3 months correlation between 7GC and NextNav is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding 7GC Co Holdings and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and 7GC Co 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 7GC Co Holdings are associated (or correlated) with NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of 7GC Co i.e., 7GC Co and NextNav Warrant go up and down completely randomly.

Pair Corralation between 7GC Co and NextNav Warrant

If you would invest  297.00  in NextNav Warrant on October 13, 2024 and sell it today you would earn a total of  143.00  from holding NextNav Warrant or generate 48.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.7%
Values	Daily Returns

7GC Co Holdings  vs.  NextNav Warrant

7GC Co Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 7GC Co Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, 7GC Co is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

NextNav Warrant

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NextNav Warrant are ranked lower than 11 (%) 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.

Pair Trading with 7GC Co and NextNav Warrant

The main advantage of trading using opposite 7GC Co and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 7GC Co position performs unexpectedly, NextNav Warrant 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 NextNav Warrant will offset losses from the drop in NextNav Warrant's long position.

The idea behind 7GC Co Holdings and NextNav Warrant 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.