Correlation Between Navient Corp and Zions Bancorporation

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

By analyzing existing cross correlation between Navient Corp and Zions Bancorporation, you can compare the effects of market volatilities on Navient Corp and Zions Bancorporation 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 Navient Corp with a short position of Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navient Corp and Zions Bancorporation.

Diversification Opportunities for Navient Corp and Zions Bancorporation

0.8

Correlation Coefficient

Navient Corp  Zions Bancorporation

Very poor diversification

The 3 months correlation between Navient and Zions is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Navient Corp and Zions Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation and Navient Corp 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 Navient Corp are associated (or correlated) with Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Navient Corp i.e., Navient Corp and Zions Bancorporation go up and down completely randomly.

Pair Corralation between Navient Corp and Zions Bancorporation

Given the investment horizon of 90 days Navient Corp is expected to generate 4.42 times less return on investment than Zions Bancorporation. In addition to that, Navient Corp is 1.25 times more volatile than Zions Bancorporation. It trades about 0.03 of its total potential returns per unit of risk. Zions Bancorporation is currently generating about 0.14 per unit of volatility. If you would invest  4,500  in Zions Bancorporation on May 6, 2025 and sell it today you would earn a total of  708.00  from holding Zions Bancorporation or generate 15.73% return on investment over 90 days.

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

Navient Corp  vs.  Zions Bancorp.

Navient Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Navient Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Navient Corp is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Zions Bancorporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zions Bancorporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Zions Bancorporation displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Navient Corp and Zions Bancorporation

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

The idea behind Navient Corp and Zions Bancorporation 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.