Correlation Between Navigator Global and Global Health
Can any of the company-specific risk be diversified away by investing in both Navigator Global and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Navigator Global and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and Global Health.
Diversification Opportunities for Navigator Global and Global Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Navigator and Global is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Navigator Global i.e., Navigator Global and Global Health go up and down completely randomly.
Pair Corralation between Navigator Global and Global Health
Assuming the 90 days trading horizon Navigator Global Investments is expected to generate 0.47 times more return on investment than Global Health. However, Navigator Global Investments is 2.11 times less risky than Global Health. It trades about 0.05 of its potential returns per unit of risk. Global Health is currently generating about 0.01 per unit of risk. If you would invest 103.00 in Navigator Global Investments on September 5, 2024 and sell it today you would earn a total of 60.00 from holding Navigator Global Investments or generate 58.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navigator Global Investments vs. Global Health
Performance |
| Timeline |
| Navigator Global Inv |
| Global Health |
Navigator Global and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and Global Health
The main advantage of trading using opposite Navigator Global and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Navigator Global vs. Westpac Banking | Navigator Global vs. Ecofibre | Navigator Global vs. Adriatic Metals Plc | Navigator Global vs. Australian Dairy Farms |
| Global Health vs. Aneka Tambang Tbk | Global Health vs. BHP Group Limited | Global Health vs. Commonwealth Bank of | Global Health vs. Commonwealth Bank of |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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