Correlation Between Navigator Tactical and Eic Value

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

By analyzing existing cross correlation between Navigator Tactical Investment and Eic Value Fund, you can compare the effects of market volatilities on Navigator Tactical and Eic Value 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 Tactical with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Tactical and Eic Value.

Diversification Opportunities for Navigator Tactical and Eic Value

0.21

Correlation Coefficient

Navigator Tactical  Eic Value

Modest diversification

The 3 months correlation between Navigator and Eic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Tactical Investment and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Navigator Tactical 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 Tactical Investment are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Navigator Tactical i.e., Navigator Tactical and Eic Value go up and down completely randomly.

Pair Corralation between Navigator Tactical and Eic Value

Assuming the 90 days horizon Navigator Tactical is expected to generate 11.97 times less return on investment than Eic Value. But when comparing it to its historical volatility, Navigator Tactical Investment is 4.41 times less risky than Eic Value. It trades about 0.06 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Eic Value Fund on December 21, 2024 and sell it today you would earn a total of  114.00  from holding Eic Value Fund or generate 6.79% return on investment over 90 days.

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

Navigator Tactical Investment  vs.  Eic Value Fund

Navigator Tactical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Tactical Investment are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Navigator Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eic Value Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eic Value Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eic Value may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Navigator Tactical and Eic Value

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

The idea behind Navigator Tactical Investment and Eic Value Fund 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.