Correlation Between SLM Corp and Navient SR
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Navient SR 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 SLM Corp and Navient SR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp Pb and Navient SR, you can compare the effects of market volatilities on SLM Corp and Navient SR 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 SLM Corp with a short position of Navient SR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Navient SR.
Diversification Opportunities for SLM Corp and Navient SR
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SLM and Navient is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp Pb and Navient SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navient SR and SLM Corp 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 SLM Corp Pb are associated (or correlated) with Navient SR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navient SR has no effect on the direction of SLM Corp i.e., SLM Corp and Navient SR go up and down completely randomly.
Pair Corralation between SLM Corp and Navient SR
Assuming the 90 days horizon SLM Corp Pb is expected to generate 0.3 times more return on investment than Navient SR. However, SLM Corp Pb is 3.29 times less risky than Navient SR. It trades about 0.24 of its potential returns per unit of risk. Navient SR is currently generating about -0.14 per unit of risk. If you would invest 7,396 in SLM Corp Pb on August 31, 2024 and sell it today you would earn a total of 98.00 from holding SLM Corp Pb or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp Pb vs. Navient SR
Performance |
| Timeline |
| SLM Corp Pb |
| Navient SR |
SLM Corp and Navient SR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Navient SR
The main advantage of trading using opposite SLM Corp and Navient SR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Navient SR 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 Navient SR will offset losses from the drop in Navient SR's long position.| SLM Corp vs. Associates First Capital | SLM Corp vs. Federal Agricultural Mortgage | SLM Corp vs. Federal Agricultural Mortgage | SLM Corp vs. Federal Agricultural Mortgage |
| Navient SR vs. Fifth Third Bancorp | Navient SR vs. Popular Capital Trust | Navient SR vs. SLM Corp Pb | Navient SR vs. CHS Inc CM |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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