Correlation Between Navigator Global and Macquarie Technology

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

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

Diversification Opportunities for Navigator Global and Macquarie Technology

-0.28

Correlation Coefficient

Navigator Global  Macquarie Technology

Very good diversification

The 3 months correlation between Navigator and Macquarie is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Navigator Global 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 Global Investments are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Navigator Global i.e., Navigator Global and Macquarie Technology go up and down completely randomly.

Pair Corralation between Navigator Global and Macquarie Technology

Assuming the 90 days trading horizon Navigator Global Investments is expected to under-perform the Macquarie Technology. In addition to that, Navigator Global is 1.39 times more volatile than Macquarie Technology Group. It trades about -0.01 of its total potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.05 per unit of volatility. If you would invest  8,403  in Macquarie Technology Group on October 5, 2024 and sell it today you would earn a total of  364.00  from holding Macquarie Technology Group or generate 4.33% return on investment over 90 days.

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

Navigator Global Investments  vs.  Macquarie Technology Group

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.

Macquarie Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Navigator Global and Macquarie Technology

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

The idea behind Navigator Global Investments and Macquarie Technology Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.