Correlation Between Clime Investment and Navigator Global

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

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

Diversification Opportunities for Clime Investment and Navigator Global

0.19

Correlation Coefficient

Clime Investment  Navigator Global

Average diversification

The 3 months correlation between Clime and Navigator is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management 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 Clime Investment 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 Clime Investment Management 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 Clime Investment i.e., Clime Investment and Navigator Global go up and down completely randomly.

Pair Corralation between Clime Investment and Navigator Global

Assuming the 90 days trading horizon Clime Investment Management is expected to under-perform the Navigator Global. But the stock apears to be less risky and, when comparing its historical volatility, Clime Investment Management is 1.39 times less risky than Navigator Global. The stock trades about -0.03 of its potential returns per unit of risk. The Navigator Global Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Navigator Global Investments on December 30, 2024 and sell it today you would earn a total of  9.00  from holding Navigator Global Investments or generate 5.14% return on investment over 90 days.

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

Clime Investment Management  vs.  Navigator Global Investments

Clime Investment Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clime Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clime Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Navigator Global Inv

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Global Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Navigator Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Clime Investment and Navigator Global

The main advantage of trading using opposite Clime Investment and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment 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 Clime Investment Management 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.