Correlation Between Microsoft and Navios Maritime

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

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

Diversification Opportunities for Microsoft and Navios Maritime

0.75

Correlation Coefficient

Microsoft  Navios Maritime

Poor diversification

The 3 months correlation between Microsoft and Navios is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Navios Maritime Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navios Maritime Partners and Microsoft 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 Microsoft are associated (or correlated) with Navios Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navios Maritime Partners has no effect on the direction of Microsoft i.e., Microsoft and Navios Maritime go up and down completely randomly.

Pair Corralation between Microsoft and Navios Maritime

Given the investment horizon of 90 days Microsoft is expected to generate 1.16 times less return on investment than Navios Maritime. But when comparing it to its historical volatility, Microsoft is 2.37 times less risky than Navios Maritime. It trades about 0.39 of its potential returns per unit of risk. Navios Maritime Partners is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,442  in Navios Maritime Partners on May 1, 2025 and sell it today you would earn a total of  800.00  from holding Navios Maritime Partners or generate 23.24% return on investment over 90 days.

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

Microsoft  vs.  Navios Maritime Partners

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Navios Maritime Partners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Navios Maritime Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Navios Maritime displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Navios Maritime

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

The idea behind Microsoft and Navios Maritime Partners 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.