Correlation Between Navios Maritime and Costamare
Can any of the company-specific risk be diversified away by investing in both Navios Maritime and Costamare 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 Costamare 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 Costamare, you can compare the effects of market volatilities on Navios Maritime and Costamare 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 Costamare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navios Maritime and Costamare.
Diversification Opportunities for Navios Maritime and Costamare
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Navios and Costamare is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare 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 Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Navios Maritime i.e., Navios Maritime and Costamare go up and down completely randomly.
Pair Corralation between Navios Maritime and Costamare
Considering the 90-day investment horizon Navios Maritime Partners is expected to generate 1.05 times more return on investment than Costamare. However, Navios Maritime is 1.05 times more volatile than Costamare. It trades about -0.05 of its potential returns per unit of risk. Costamare is currently generating about -0.17 per unit of risk. If you would invest 4,329 in Navios Maritime Partners on November 1, 2024 and sell it today you would lose (123.00) from holding Navios Maritime Partners or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navios Maritime Partners vs. Costamare
Performance |
| Timeline |
| Navios Maritime Partners |
| Costamare |
Navios Maritime and Costamare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navios Maritime and Costamare
The main advantage of trading using opposite Navios Maritime and Costamare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navios Maritime position performs unexpectedly, Costamare 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 Costamare will offset losses from the drop in Costamare's long position.| Navios Maritime vs. Global Ship Lease | Navios Maritime vs. Costamare | Navios Maritime vs. Genco Shipping Trading | Navios Maritime vs. Danaos |
| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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