Correlation Between Horseshoe Metals and Navigator Global

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

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

Diversification Opportunities for Horseshoe Metals and Navigator Global

-0.58

Correlation Coefficient

Horseshoe Metals  Navigator Global

Excellent diversification

The 3 months correlation between Horseshoe and Navigator is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Horseshoe Metals 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 Horseshoe Metals 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 Horseshoe Metals 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 Horseshoe Metals i.e., Horseshoe Metals and Navigator Global go up and down completely randomly.

Pair Corralation between Horseshoe Metals and Navigator Global

Assuming the 90 days trading horizon Horseshoe Metals is expected to generate 2.98 times more return on investment than Navigator Global. However, Horseshoe Metals is 2.98 times more volatile than Navigator Global Investments. It trades about 0.18 of its potential returns per unit of risk. Navigator Global Investments is currently generating about 0.06 per unit of risk. If you would invest  0.90  in Horseshoe Metals on October 6, 2024 and sell it today you would earn a total of  0.50  from holding Horseshoe Metals or generate 55.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Horseshoe Metals  vs.  Navigator Global Investments

Horseshoe Metals

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Horseshoe Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Horseshoe Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Navigator Global Inv

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Horseshoe Metals and Navigator Global

The main advantage of trading using opposite Horseshoe Metals and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horseshoe Metals 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 Horseshoe Metals 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.