Correlation Between Navigator Global and EP Financial
Can any of the company-specific risk be diversified away by investing in both Navigator Global and EP Financial 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 EP Financial 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 EP Financial Group, you can compare the effects of market volatilities on Navigator Global and EP Financial 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 EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and EP Financial.
Diversification Opportunities for Navigator Global and EP Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Navigator and EP1 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group 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 EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Navigator Global i.e., Navigator Global and EP Financial go up and down completely randomly.
Pair Corralation between Navigator Global and EP Financial
Assuming the 90 days trading horizon Navigator Global Investments is expected to under-perform the EP Financial. But the stock apears to be less risky and, when comparing its historical volatility, Navigator Global Investments is 1.11 times less risky than EP Financial. The stock trades about -0.02 of its potential returns per unit of risk. The EP Financial Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 48.00 in EP Financial Group on September 1, 2024 and sell it today you would earn a total of 4.00 from holding EP Financial Group or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navigator Global Investments vs. EP Financial Group
Performance |
| Timeline |
| Navigator Global Inv |
| EP Financial Group |
Navigator Global and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and EP Financial
The main advantage of trading using opposite Navigator Global and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Navigator Global vs. A1 Investments Resources | Navigator Global vs. K2 Asset Management | Navigator Global vs. MFF Capital Investments | Navigator Global vs. Ainsworth Game Technology |
| EP Financial vs. Navigator Global Investments | EP Financial vs. Collins Foods | EP Financial vs. Hotel Property Investments | EP Financial vs. Queste Communications |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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