Correlation Between Navigator Equity and Via Renewables

Can any of the company-specific risk be diversified away by investing in both Navigator Equity and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Navigator Equity and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Equity and Via Renewables.

Diversification Opportunities for Navigator Equity and Via Renewables

0.15

Correlation Coefficient

Navigator Equity  Via Renewables

Average diversification

The 3 months correlation between Navigator and Via is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Equity Hedged and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Navigator Equity i.e., Navigator Equity and Via Renewables go up and down completely randomly.

Pair Corralation between Navigator Equity and Via Renewables

If you would invest  2,059  in Via Renewables on September 12, 2024 and sell it today you would earn a total of  176.00  from holding Via Renewables or generate 8.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	45.31%
Values	Daily Returns

Navigator Equity Hedged  vs.  Via Renewables

Navigator Equity Hedged

Risk-Adjusted Performance

0 of 100

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.

Via Renewables

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Navigator Equity and Via Renewables

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

The idea behind Navigator Equity Hedged and Via Renewables 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.