Correlation Between NOS SGPS and Navigator

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

By analyzing existing cross correlation between NOS SGPS SA and The Navigator, you can compare the effects of market volatilities on NOS SGPS and Navigator 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 NOS SGPS with a short position of Navigator. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOS SGPS and Navigator.

Diversification Opportunities for NOS SGPS and Navigator

0.74

Correlation Coefficient

NOS SGPS  Navigator

Poor diversification

The 3 months correlation between NOS and Navigator is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NOS SGPS SA and The Navigator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator and NOS SGPS 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 NOS SGPS SA are associated (or correlated) with Navigator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator has no effect on the direction of NOS SGPS i.e., NOS SGPS and Navigator go up and down completely randomly.

Pair Corralation between NOS SGPS and Navigator

Assuming the 90 days trading horizon NOS SGPS SA is expected to generate 0.88 times more return on investment than Navigator. However, NOS SGPS SA is 1.13 times less risky than Navigator. It trades about -0.09 of its potential returns per unit of risk. The Navigator is currently generating about -0.1 per unit of risk. If you would invest  361.00  in NOS SGPS SA on September 12, 2024 and sell it today you would lose (22.00) from holding NOS SGPS SA or give up 6.09% of portfolio value over 90 days.

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

NOS SGPS SA  vs.  The Navigator

NOS SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOS SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NOS SGPS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Navigator

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Navigator has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with NOS SGPS and Navigator

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

The idea behind NOS SGPS SA and The Navigator 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.