Correlation Between NextTrip and FiscalNote Holdings

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

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

Diversification Opportunities for NextTrip and FiscalNote Holdings

0.12

Correlation Coefficient

NextTrip  FiscalNote Holdings

Average diversification

The 3 months correlation between NextTrip and FiscalNote is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NextTrip and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and NextTrip 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 NextTrip are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of NextTrip i.e., NextTrip and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between NextTrip and FiscalNote Holdings

Given the investment horizon of 90 days NextTrip is expected to generate 0.91 times more return on investment than FiscalNote Holdings. However, NextTrip is 1.1 times less risky than FiscalNote Holdings. It trades about 0.17 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about 0.01 per unit of risk. If you would invest  221.00  in NextTrip on May 5, 2025 and sell it today you would earn a total of  153.00  from holding NextTrip or generate 69.23% return on investment over 90 days.

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

NextTrip  vs.  FiscalNote Holdings

NextTrip

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NextTrip are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, NextTrip reported solid returns over the last few months and may actually be approaching a breakup point.

FiscalNote Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FiscalNote Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NextTrip and FiscalNote Holdings

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

The idea behind NextTrip and FiscalNote 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.