Correlation Between Sun Vending and Navakij Insurance

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

By analyzing existing cross correlation between Sun Vending Technology and The Navakij Insurance, you can compare the effects of market volatilities on Sun Vending and Navakij Insurance 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 Sun Vending with a short position of Navakij Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Vending and Navakij Insurance.

Diversification Opportunities for Sun Vending and Navakij Insurance

0.28

Correlation Coefficient

Sun Vending  Navakij Insurance

Modest diversification

The 3 months correlation between Sun and Navakij is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sun Vending Technology and The Navakij Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navakij Insurance and Sun Vending 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 Sun Vending Technology are associated (or correlated) with Navakij Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navakij Insurance has no effect on the direction of Sun Vending i.e., Sun Vending and Navakij Insurance go up and down completely randomly.

Pair Corralation between Sun Vending and Navakij Insurance

Assuming the 90 days trading horizon Sun Vending Technology is expected to under-perform the Navakij Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Sun Vending Technology is 1.15 times less risky than Navakij Insurance. The stock trades about -0.13 of its potential returns per unit of risk. The The Navakij Insurance is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,525  in The Navakij Insurance on December 28, 2024 and sell it today you would lose (175.00) from holding The Navakij Insurance or give up 6.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Sun Vending Technology  vs.  The Navakij Insurance

Sun Vending Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Vending Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Navakij Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Navakij Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Sun Vending and Navakij Insurance

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

The idea behind Sun Vending Technology and The Navakij Insurance 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.