Correlation Between Navigator Global and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Navigator Global and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on Navigator Global and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and Westpac Banking.
Diversification Opportunities for Navigator Global and Westpac Banking
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Navigator and Westpac is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Navigator Global i.e., Navigator Global and Westpac Banking go up and down completely randomly.
Pair Corralation between Navigator Global and Westpac Banking
Assuming the 90 days trading horizon Navigator Global Investments is expected to generate 7.37 times more return on investment than Westpac Banking. However, Navigator Global is 7.37 times more volatile than Westpac Banking. It trades about 0.05 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.1 per unit of risk. If you would invest 101.00 in Navigator Global Investments on September 12, 2024 and sell it today you would earn a total of 69.00 from holding Navigator Global Investments or generate 68.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 49.0% |
| Values | Daily Returns |
Navigator Global Investments vs. Westpac Banking
Performance |
| Timeline |
| Navigator Global Inv |
| Westpac Banking |
Navigator Global and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and Westpac Banking
The main advantage of trading using opposite Navigator Global and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Navigator Global vs. Aneka Tambang Tbk | Navigator Global vs. Commonwealth Bank | Navigator Global vs. BHP Group Limited | Navigator Global vs. Rio Tinto |
| Westpac Banking vs. Navigator Global Investments | Westpac Banking vs. Hotel Property Investments | Westpac Banking vs. Garda Diversified Ppty | Westpac Banking vs. Australian United Investment |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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