Correlation Between Retail Food and Navigator Global

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

By analyzing existing cross correlation between Retail Food Group and Navigator Global Investments, you can compare the effects of market volatilities on Retail Food and Navigator Global 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 Retail Food with a short position of Navigator Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Navigator Global.

Diversification Opportunities for Retail Food and Navigator Global

-0.35

Correlation Coefficient

Retail Food  Navigator Global

Very good diversification

The 3 months correlation between Retail and Navigator is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Navigator Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Global Inv and Retail Food 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 Retail Food Group are associated (or correlated) with Navigator Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Global Inv has no effect on the direction of Retail Food i.e., Retail Food and Navigator Global go up and down completely randomly.

Pair Corralation between Retail Food and Navigator Global

Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the Navigator Global. In addition to that, Retail Food is 1.27 times more volatile than Navigator Global Investments. It trades about -0.01 of its total potential returns per unit of risk. Navigator Global Investments is currently generating about -0.01 per unit of volatility. If you would invest  174.00  in Navigator Global Investments on September 30, 2024 and sell it today you would lose (4.00) from holding Navigator Global Investments or give up 2.3% of portfolio value over 90 days.

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

Retail Food Group  vs.  Navigator Global Investments

Retail Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Retail Food and Navigator Global

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

The idea behind Retail Food Group and Navigator Global Investments 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.