Correlation Between Navios Maritime and Global Ship

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Can any of the company-specific risk be diversified away by investing in both Navios Maritime and Global Ship 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 Navios Maritime and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navios Maritime Partners and Global Ship Lease, you can compare the effects of market volatilities on Navios Maritime and Global Ship 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 Navios Maritime with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navios Maritime and Global Ship.

Diversification Opportunities for Navios Maritime and Global Ship

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Navios and Global is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and Navios Maritime 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 Navios Maritime Partners are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Navios Maritime i.e., Navios Maritime and Global Ship go up and down completely randomly.

Pair Corralation between Navios Maritime and Global Ship

Considering the 90-day investment horizon Navios Maritime Partners is expected to generate 1.88 times more return on investment than Global Ship. However, Navios Maritime is 1.88 times more volatile than Global Ship Lease. It trades about 0.04 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.12 per unit of risk. If you would invest  4,634  in Navios Maritime Partners on August 15, 2024 and sell it today you would earn a total of  253.00  from holding Navios Maritime Partners or generate 5.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Navios Maritime Partners  vs.  Global Ship Lease

 Performance 
       Timeline  
Navios Maritime Partners 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Navios Maritime Partners are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Navios Maritime may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Global Ship Lease 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global Ship Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Navios Maritime and Global Ship Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Navios Maritime and Global Ship

The main advantage of trading using opposite Navios Maritime and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navios Maritime position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.
The idea behind Navios Maritime Partners and Global Ship Lease 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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