Correlation Between Global Ship and Navios Maritime
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and Navios Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Navios Maritime Partners, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of Navios Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Navios Maritime.
Diversification Opportunities for Global Ship and Navios Maritime
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Navios is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease 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 Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Navios Maritime go up and down completely randomly.
Pair Corralation between Global Ship and Navios Maritime
Considering the 90-day investment horizon Global Ship Lease is expected to generate 0.6 times more return on investment than Navios Maritime. However, Global Ship Lease is 1.66 times less risky than Navios Maritime. It trades about 0.04 of its potential returns per unit of risk. Navios Maritime Partners is currently generating about 0.0 per unit of risk. If you would invest 2,121 in Global Ship Lease on October 20, 2024 and sell it today you would earn a total of 18.00 from holding Global Ship Lease or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Navios Maritime Partners
Performance |
| Timeline |
| Global Ship Lease |
| Navios Maritime Partners |
Global Ship and Navios Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Navios Maritime
The main advantage of trading using opposite Global Ship and Navios Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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