Correlation Between Navigator Global and Rubicon Water

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

Diversification Opportunities for Navigator Global and Rubicon Water

-0.02

Correlation Coefficient

Navigator Global  Rubicon Water

Good diversification

The 3 months correlation between Navigator and Rubicon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Global Investments and Rubicon Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Water 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 Rubicon Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Water has no effect on the direction of Navigator Global i.e., Navigator Global and Rubicon Water go up and down completely randomly.

Pair Corralation between Navigator Global and Rubicon Water

Assuming the 90 days trading horizon Navigator Global Investments is expected to under-perform the Rubicon Water. But the stock apears to be less risky and, when comparing its historical volatility, Navigator Global Investments is 1.75 times less risky than Rubicon Water. The stock trades about -0.02 of its potential returns per unit of risk. The Rubicon Water is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Rubicon Water on October 25, 2024 and sell it today you would earn a total of  2.00  from holding Rubicon Water or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Navigator Global Investments  vs.  Rubicon Water

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.

Rubicon Water

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Water are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Rubicon Water may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Navigator Global and Rubicon Water

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

The idea behind Navigator Global Investments and Rubicon Water 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.