Correlation Between SM Investments and NextNav Warrant

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

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

Diversification Opportunities for SM Investments and NextNav Warrant

-0.12

Correlation Coefficient

SM Investments  NextNav Warrant

Good diversification

The 3 months correlation between SVTMF and NextNav is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and SM Investments 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 SM Investments 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 SM Investments i.e., SM Investments and NextNav Warrant go up and down completely randomly.

Pair Corralation between SM Investments and NextNav Warrant

Assuming the 90 days horizon SM Investments is expected to under-perform the NextNav Warrant. But the pink sheet apears to be less risky and, when comparing its historical volatility, SM Investments is 2.75 times less risky than NextNav Warrant. The pink sheet trades about -0.18 of its potential returns per unit of risk. The NextNav Warrant is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  599.00  in NextNav Warrant on July 19, 2025 and sell it today you would lose (131.00) from holding NextNav Warrant or give up 21.87% of portfolio value over 90 days.

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

SM Investments  vs.  NextNav Warrant

SM Investments

Risk-Adjusted Performance

Weakest

Over the last 90 days SM Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NextNav Warrant

Risk-Adjusted Performance

Weakest

Over the last 90 days NextNav Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in November 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with SM Investments and NextNav Warrant

The main advantage of trading using opposite SM Investments and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments 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 SM Investments 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.