diversifiable risk of combining Aurora Mobile and Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Mobile and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Aurora Mobile and Nextnav Acquisition 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 Aurora Mobile with a short position of Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Mobile and Nextnav Acquisition.
Diversification Opportunities for Aurora Mobile and Nextnav Acquisition
Pair Corralation between Aurora Mobile and Nextnav Acquisition
Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the Nextnav Acquisition. In addition to that, Aurora Mobile is 1.24 times more volatile than Nextnav Acquisition Corp. It trades about -0.08 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.06 per unit of volatility. If you would invest 273.00 in Nextnav Acquisition Corp on December 1, 2023 and sell it today you would earn a total of 124.00 from holding Nextnav Acquisition Corp or generate 45.42% return on investment over 90 days.
Aurora Mobile vs. Nextnav Acquisition Corp
Aurora Mobile and Nextnav Acquisition Volatility Contrast
Pair Trading with Aurora Mobile and Nextnav AcquisitionThe main advantage of trading using opposite Aurora Mobile and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, Nextnav Acquisition 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 Acquisition will offset losses from the drop in Nextnav Acquisition's long position. The idea behind Aurora Mobile and Nextnav Acquisition Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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