Correlation Between Navigator Global and WiseTech Global
Can any of the company-specific risk be diversified away by investing in both Navigator Global and WiseTech Global 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 WiseTech Global 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 WiseTech Global Limited, you can compare the effects of market volatilities on Navigator Global and WiseTech Global 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 WiseTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Global and WiseTech Global.
Diversification Opportunities for Navigator Global and WiseTech Global
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Navigator and WiseTech is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and WiseTech Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseTech Global 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 WiseTech Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseTech Global has no effect on the direction of Navigator Global i.e., Navigator Global and WiseTech Global go up and down completely randomly.
Pair Corralation between Navigator Global and WiseTech Global
Assuming the 90 days trading horizon Navigator Global is expected to generate 3.61 times less return on investment than WiseTech Global. But when comparing it to its historical volatility, Navigator Global Investments is 1.31 times less risky than WiseTech Global. It trades about 0.04 of its potential returns per unit of risk. WiseTech Global Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12,152 in WiseTech Global Limited on September 3, 2024 and sell it today you would earn a total of 658.00 from holding WiseTech Global Limited or generate 5.41% 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. WiseTech Global Limited
Performance |
| Timeline |
| Navigator Global Inv |
| WiseTech Global |
Navigator Global and WiseTech Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Global and WiseTech Global
The main advantage of trading using opposite Navigator Global and WiseTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Global position performs unexpectedly, WiseTech Global 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 WiseTech Global will offset losses from the drop in WiseTech Global's long position.| Navigator Global vs. Audio Pixels Holdings | Navigator Global vs. Iodm | Navigator Global vs. Nsx | Navigator Global vs. TTG Fintech |
| WiseTech Global vs. Hotel Property Investments | WiseTech Global vs. Navigator Global Investments | WiseTech Global vs. Centaurus Metals | WiseTech Global vs. MetalsGrove 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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