Correlation Between NICK Old and Navient Corp

Can any of the company-specific risk be diversified away by investing in both NICK Old and Navient Corp 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 NICK Old and Navient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NICK Old and Navient Corp, you can compare the effects of market volatilities on NICK Old and Navient Corp 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 NICK Old with a short position of Navient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICK Old and Navient Corp.

Diversification Opportunities for NICK Old and Navient Corp

0.0

Correlation Coefficient

NICK Old  Navient Corp

Pay attention - limited upside

The 3 months correlation between NICK and Navient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NICK Old and Navient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navient Corp and NICK Old 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 NICK Old are associated (or correlated) with Navient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navient Corp has no effect on the direction of NICK Old i.e., NICK Old and Navient Corp go up and down completely randomly.

Pair Corralation between NICK Old and Navient Corp

If you would invest  1,283  in Navient Corp on December 29, 2024 and sell it today you would lose (1.00) from holding Navient Corp or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NICK Old  vs.  Navient Corp

NICK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, NICK Old is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Navient Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Navient Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Navient Corp is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with NICK Old and Navient Corp

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

The idea behind NICK Old and Navient Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.