Correlation Between NYSE Composite and Navigator Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Navigator Holdings 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 NYSE Composite and Navigator Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Navigator Holdings, you can compare the effects of market volatilities on NYSE Composite and Navigator Holdings 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 NYSE Composite with a short position of Navigator Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Navigator Holdings.
Diversification Opportunities for NYSE Composite and Navigator Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Navigator is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Navigator Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Holdings and NYSE Composite 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 NYSE Composite are associated (or correlated) with Navigator Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Navigator Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Navigator Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.47 times more return on investment than Navigator Holdings. However, NYSE Composite is 2.14 times less risky than Navigator Holdings. It trades about 0.13 of its potential returns per unit of risk. Navigator Holdings is currently generating about 0.05 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Navigator Holdings
Performance |
| Timeline |
NYSE Composite and Navigator Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Navigator Holdings
Pair trading matchups for Navigator Holdings
Pair Trading with NYSE Composite and Navigator Holdings
The main advantage of trading using opposite NYSE Composite and Navigator Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Navigator Holdings 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 Navigator Holdings will offset losses from the drop in Navigator Holdings' long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Navigator Holdings vs. Scorpio Tankers | Navigator Holdings vs. DHT Holdings | Navigator Holdings vs. Teekay | Navigator Holdings vs. HUMANA INC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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