Correlation Between Navient Corp and PRA
Can any of the company-specific risk be diversified away by investing in both Navient Corp and PRA 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 Navient Corp and PRA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navient Corp and PRA Group, you can compare the effects of market volatilities on Navient Corp and PRA 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 Navient Corp with a short position of PRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navient Corp and PRA.
Diversification Opportunities for Navient Corp and PRA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Navient and PRA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Navient Corp and PRA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRA Group and Navient Corp 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 Navient Corp are associated (or correlated) with PRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRA Group has no effect on the direction of Navient Corp i.e., Navient Corp and PRA go up and down completely randomly.
Pair Corralation between Navient Corp and PRA
Given the investment horizon of 90 days Navient Corp is expected to generate 6.86 times less return on investment than PRA. But when comparing it to its historical volatility, Navient Corp is 1.39 times less risky than PRA. It trades about 0.03 of its potential returns per unit of risk. PRA Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,888 in PRA Group on August 30, 2024 and sell it today you would earn a total of 259.00 from holding PRA Group or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navient Corp vs. PRA Group
Performance |
| Timeline |
| Navient Corp |
| PRA Group |
Navient Corp and PRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navient Corp and PRA
The main advantage of trading using opposite Navient Corp and PRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navient Corp position performs unexpectedly, PRA 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 PRA will offset losses from the drop in PRA's long position.| Navient Corp vs. 360 Finance | Navient Corp vs. Atlanticus Holdings | Navient Corp vs. X Financial Class | Navient Corp vs. Yirendai |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |