Correlation Between Air New and Navigator Global
Can any of the company-specific risk be diversified away by investing in both Air New and Navigator Global 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 Air New and Navigator Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Navigator Global Investments, you can compare the effects of market volatilities on Air New and Navigator Global 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 Air New with a short position of Navigator Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Navigator Global.
Diversification Opportunities for Air New and Navigator Global
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Navigator is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Navigator Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Global Inv and Air New 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 Air New Zealand are associated (or correlated) with Navigator Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Global Inv has no effect on the direction of Air New i.e., Air New and Navigator Global go up and down completely randomly.
Pair Corralation between Air New and Navigator Global
Assuming the 90 days trading horizon Air New Zealand is expected to generate 0.51 times more return on investment than Navigator Global. However, Air New Zealand is 1.97 times less risky than Navigator Global. It trades about 0.31 of its potential returns per unit of risk. Navigator Global Investments is currently generating about -0.02 per unit of risk. If you would invest 47.00 in Air New Zealand on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Air New Zealand or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Navigator Global Investments
Performance |
| Timeline |
| Air New Zealand |
| Navigator Global Inv |
Air New and Navigator Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Navigator Global
The main advantage of trading using opposite Air New and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Navigator Global 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 Navigator Global will offset losses from the drop in Navigator Global's long position.| Air New vs. Carlton Investments | Air New vs. Auctus Alternative Investments | Air New vs. Diversified United Investment | Air New vs. REGAL ASIAN INVESTMENTS |
| Navigator Global vs. A1 Investments Resources | Navigator Global vs. K2 Asset Management | Navigator Global vs. MFF Capital Investments | Navigator Global vs. Ainsworth Game Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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