Correlation Between Navigator and NOS SGPS

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

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

Diversification Opportunities for Navigator and NOS SGPS

0.14

Correlation Coefficient

Navigator  NOS SGPS

Average diversification

The 3 months correlation between Navigator and NOS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding The Navigator and NOS SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOS SGPS SA and Navigator 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 The Navigator are associated (or correlated) with NOS SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOS SGPS SA has no effect on the direction of Navigator i.e., Navigator and NOS SGPS go up and down completely randomly.

Pair Corralation between Navigator and NOS SGPS

Assuming the 90 days trading horizon The Navigator is expected to generate 1.24 times more return on investment than NOS SGPS. However, Navigator is 1.24 times more volatile than NOS SGPS SA. It trades about 0.03 of its potential returns per unit of risk. NOS SGPS SA is currently generating about -0.01 per unit of risk. If you would invest  317.00  in The Navigator on April 23, 2025 and sell it today you would earn a total of  5.00  from holding The Navigator or generate 1.58% return on investment over 90 days.

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

The Navigator  vs.  NOS SGPS SA

Navigator

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Navigator are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Navigator is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

NOS SGPS SA

Risk-Adjusted Performance

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.

Pair Trading with Navigator and NOS SGPS

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

The idea behind The Navigator and NOS SGPS SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.