Correlation Between Navigator Global and Air New
Can any of the company-specific risk be diversified away by investing in both Navigator Global and Air New 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 Navigator Global and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navigator Global Investments and Air New Zealand, you can compare the effects of market volatilities on Navigator Global and Air New 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 Navigator Global with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and Air New.
Diversification Opportunities for Navigator Global and Air New
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Navigator and Air is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Navigator Global 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 Navigator Global Investments are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Navigator Global i.e., Navigator Global and Air New go up and down completely randomly.
Pair Corralation between Navigator Global and Air New
Assuming the 90 days trading horizon Navigator Global Investments is expected to under-perform the Air New. In addition to that, Navigator Global is 1.77 times more volatile than Air New Zealand. It trades about -0.12 of its total potential returns per unit of risk. Air New Zealand is currently generating about 0.12 per unit of volatility. If you would invest 55.00 in Air New Zealand on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Air New Zealand or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navigator Global Investments vs. Air New Zealand
Performance |
| Timeline |
| Navigator Global Inv |
| Air New Zealand |
Navigator Global and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and Air New
The main advantage of trading using opposite Navigator Global and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Navigator Global vs. Cleanaway Waste Management | Navigator Global vs. Centrex Metals | Navigator Global vs. Autosports Group | Navigator Global vs. K2 Asset Management |
| Air New vs. Galena Mining | Air New vs. Aurelia Metals | Air New vs. Platinum Asset Management | Air New vs. Globe Metals Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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