Correlation Between Navigator Global and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Navigator Global and Macquarie Bank 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 Macquarie Bank 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 Macquarie Bank Limited, you can compare the effects of market volatilities on Navigator Global and Macquarie Bank 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 Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and Macquarie Bank.
Diversification Opportunities for Navigator Global and Macquarie Bank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Navigator and Macquarie is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank 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 Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of Navigator Global i.e., Navigator Global and Macquarie Bank go up and down completely randomly.
Pair Corralation between Navigator Global and Macquarie Bank
Assuming the 90 days trading horizon Navigator Global Investments is expected to generate 6.24 times more return on investment than Macquarie Bank. However, Navigator Global is 6.24 times more volatile than Macquarie Bank Limited. It trades about 0.08 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of risk. If you would invest 91.00 in Navigator Global Investments on August 29, 2024 and sell it today you would earn a total of 79.00 from holding Navigator Global Investments or generate 86.81% 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. Macquarie Bank Limited
Performance |
| Timeline |
| Navigator Global Inv |
| Macquarie Bank |
Navigator Global and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and Macquarie Bank
The main advantage of trading using opposite Navigator Global and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, Macquarie Bank 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 Macquarie Bank will offset losses from the drop in Macquarie Bank's long position.| Navigator Global vs. National Australia Bank | Navigator Global vs. National Australia Bank | Navigator Global vs. Westpac Banking | Navigator Global vs. National Australia Bank |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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