Correlation Between International Seaways and Navigator Holdings
Can any of the company-specific risk be diversified away by investing in both International Seaways and Navigator Holdings 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 International Seaways and Navigator Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and Navigator Holdings, you can compare the effects of market volatilities on International Seaways and Navigator Holdings 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 International Seaways with a short position of Navigator Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and Navigator Holdings.
Diversification Opportunities for International Seaways and Navigator Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Navigator is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and Navigator Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Holdings and International Seaways 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 International Seaways are associated (or correlated) with Navigator Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Holdings has no effect on the direction of International Seaways i.e., International Seaways and Navigator Holdings go up and down completely randomly.
Pair Corralation between International Seaways and Navigator Holdings
Given the investment horizon of 90 days International Seaways is expected to under-perform the Navigator Holdings. In addition to that, International Seaways is 1.05 times more volatile than Navigator Holdings. It trades about -0.26 of its total potential returns per unit of risk. Navigator Holdings is currently generating about 0.05 per unit of volatility. If you would invest 1,571 in Navigator Holdings on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Navigator Holdings or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Seaways vs. Navigator Holdings
Performance |
| Timeline |
| International Seaways |
| Navigator Holdings |
International Seaways and Navigator Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and Navigator Holdings
The main advantage of trading using opposite International Seaways and Navigator Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, Navigator Holdings 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 Navigator Holdings will offset losses from the drop in Navigator Holdings' long position.| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
| Navigator Holdings vs. Scorpio Tankers | Navigator Holdings vs. Teekay Tankers | Navigator Holdings vs. International Seaways | Navigator Holdings vs. Frontline |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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