Correlation Between ANZ Group and Navigator Global

Can any of the company-specific risk be diversified away by investing in both ANZ Group and Navigator 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 ANZ Group and Navigator Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANZ Group Holdings and Navigator Global Investments, you can compare the effects of market volatilities on ANZ Group and Navigator 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 ANZ Group with a short position of Navigator Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Navigator Global.

Diversification Opportunities for ANZ Group and Navigator Global

-0.05

Correlation Coefficient

ANZ Group  Navigator Global

Good diversification

The 3 months correlation between ANZ and Navigator is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Navigator Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Global Inv and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with Navigator Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Global Inv has no effect on the direction of ANZ Group i.e., ANZ Group and Navigator Global go up and down completely randomly.

Pair Corralation between ANZ Group and Navigator Global

Assuming the 90 days trading horizon ANZ Group Holdings is expected to under-perform the Navigator Global. But the stock apears to be less risky and, when comparing its historical volatility, ANZ Group Holdings is 11.12 times less risky than Navigator Global. The stock trades about -0.01 of its potential returns per unit of risk. The Navigator Global Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Navigator Global Investments on December 23, 2024 and sell it today you would earn a total of  23.00  from holding Navigator Global Investments or generate 14.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ANZ Group Holdings  vs.  Navigator Global Investments

ANZ Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZ Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Navigator Global Inv

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Global Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Navigator Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANZ Group and Navigator Global

The main advantage of trading using opposite ANZ Group and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group position performs unexpectedly, Navigator 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 Navigator Global will offset losses from the drop in Navigator Global's long position.

The idea behind ANZ Group Holdings and Navigator Global Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.