Correlation Between Navigator Global and Mystate

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

Diversification Opportunities for Navigator Global and Mystate

-0.69

Correlation Coefficient

Navigator Global  Mystate

Excellent diversification

The 3 months correlation between Navigator and Mystate is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Mystate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mystate 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 Mystate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mystate has no effect on the direction of Navigator Global i.e., Navigator Global and Mystate go up and down completely randomly.

Pair Corralation between Navigator Global and Mystate

Assuming the 90 days trading horizon Navigator Global Investments is expected to under-perform the Mystate. In addition to that, Navigator Global is 1.8 times more volatile than Mystate. It trades about -0.06 of its total potential returns per unit of risk. Mystate is currently generating about 0.23 per unit of volatility. If you would invest  375.00  in Mystate on September 22, 2024 and sell it today you would earn a total of  50.00  from holding Mystate or generate 13.33% return on investment over 90 days.

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

Navigator Global Investments  vs.  Mystate

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.

Mystate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mystate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mystate may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Navigator Global and Mystate

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

The idea behind Navigator Global Investments and Mystate 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.