Correlation Between Super Retail and Navigator Global
Can any of the company-specific risk be diversified away by investing in both Super Retail 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 Super Retail and Navigator Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Retail Group and Navigator Global Investments, you can compare the effects of market volatilities on Super Retail 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 Super Retail with a short position of Navigator Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Navigator Global.
Diversification Opportunities for Super Retail and Navigator Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and Navigator is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail 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 Super Retail 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 Super Retail 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 Super Retail i.e., Super Retail and Navigator Global go up and down completely randomly.
Pair Corralation between Super Retail and Navigator Global
Assuming the 90 days trading horizon Super Retail is expected to generate 1.22 times less return on investment than Navigator Global. But when comparing it to its historical volatility, Super Retail Group is 1.42 times less risky than Navigator Global. It trades about 0.06 of its potential returns per unit of risk. Navigator Global Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Navigator Global Investments on September 26, 2024 and sell it today you would earn a total of 65.00 from holding Navigator Global Investments or generate 63.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Super Retail Group vs. Navigator Global Investments
Performance |
Timeline |
Super Retail Group |
Navigator Global Inv |
Super Retail and Navigator Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Super Retail and Navigator Global
The main advantage of trading using opposite Super Retail and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail 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.Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Unibail Rodamco Westfield SE | Super Retail vs. Macquarie Group | Super Retail vs. Commonwealth Bank |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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