Correlation Between Golden Ocean and Navios Maritime
Can any of the company-specific risk be diversified away by investing in both Golden Ocean 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 Golden Ocean and Navios Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Ocean Group and Navios Maritime Partners, you can compare the effects of market volatilities on Golden Ocean 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 Golden Ocean with a short position of Navios Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Navios Maritime.
Diversification Opportunities for Golden Ocean and Navios Maritime
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Navios is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group 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 Golden Ocean 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 Golden Ocean Group 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 Golden Ocean i.e., Golden Ocean and Navios Maritime go up and down completely randomly.
Pair Corralation between Golden Ocean and Navios Maritime
Given the investment horizon of 90 days Golden Ocean Group is expected to generate 1.0 times more return on investment than Navios Maritime. However, Golden Ocean Group is 1.0 times less risky than Navios Maritime. It trades about -0.17 of its potential returns per unit of risk. Navios Maritime Partners is currently generating about -0.22 per unit of risk. If you would invest 1,298 in Golden Ocean Group on August 26, 2024 and sell it today you would lose (184.00) from holding Golden Ocean Group or give up 14.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ocean Group vs. Navios Maritime Partners
Performance |
| Timeline |
| Golden Ocean Group |
| Navios Maritime Partners |
Golden Ocean and Navios Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and Navios Maritime
The main advantage of trading using opposite Golden Ocean and Navios Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean 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.| Golden Ocean vs. Star Bulk Carriers | Golden Ocean vs. TOP Ships | Golden Ocean vs. Seanergy Maritime Holdings | Golden Ocean vs. Performance Shipping |
| Navios Maritime vs. Global Ship Lease | Navios Maritime vs. Costamare | Navios Maritime vs. Genco Shipping Trading | Navios Maritime vs. Danaos |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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