Correlation Between Navigator Equity and Spring Valley

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

By analyzing existing cross correlation between Navigator Equity Hedged and Spring Valley Acquisition, you can compare the effects of market volatilities on Navigator Equity and Spring Valley 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 Navigator Equity with a short position of Spring Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Equity and Spring Valley.

Diversification Opportunities for Navigator Equity and Spring Valley

-0.22

Correlation Coefficient

Navigator Equity  Spring Valley

Very good diversification

The 3 months correlation between Navigator and Spring is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Equity Hedged and Spring Valley Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Valley Acquisition and Navigator Equity 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 Navigator Equity Hedged are associated (or correlated) with Spring Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Valley Acquisition has no effect on the direction of Navigator Equity i.e., Navigator Equity and Spring Valley go up and down completely randomly.

Pair Corralation between Navigator Equity and Spring Valley

Assuming the 90 days horizon Navigator Equity Hedged is expected to under-perform the Spring Valley. But the mutual fund apears to be less risky and, when comparing its historical volatility, Navigator Equity Hedged is 1.97 times less risky than Spring Valley. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Spring Valley Acquisition is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,126  in Spring Valley Acquisition on December 29, 2024 and sell it today you would earn a total of  26.00  from holding Spring Valley Acquisition or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.54%
Values	Daily Returns

Navigator Equity Hedged  vs.  Spring Valley Acquisition

Navigator Equity Hedged

Risk-Adjusted Performance

Very Weak

Over the last 90 days Navigator Equity Hedged has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Navigator Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Spring Valley Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Spring Valley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Navigator Equity and Spring Valley

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

The idea behind Navigator Equity Hedged and Spring Valley Acquisition 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.