Correlation Between Navios Maritime and Danaos
Can any of the company-specific risk be diversified away by investing in both Navios Maritime and Danaos 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 Danaos 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 Danaos, you can compare the effects of market volatilities on Navios Maritime and Danaos 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 Danaos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navios Maritime and Danaos.
Diversification Opportunities for Navios Maritime and Danaos
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Navios and Danaos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and Danaos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaos 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 Danaos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaos has no effect on the direction of Navios Maritime i.e., Navios Maritime and Danaos go up and down completely randomly.
Pair Corralation between Navios Maritime and Danaos
Considering the 90-day investment horizon Navios Maritime Partners is expected to under-perform the Danaos. In addition to that, Navios Maritime is 1.27 times more volatile than Danaos. It trades about -0.13 of its total potential returns per unit of risk. Danaos is currently generating about -0.01 per unit of volatility. If you would invest 8,554 in Danaos on November 18, 2024 and sell it today you would lose (157.00) from holding Danaos or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navios Maritime Partners vs. Danaos
Performance |
| Timeline |
| Navios Maritime Partners |
| Danaos |
Navios Maritime and Danaos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navios Maritime and Danaos
The main advantage of trading using opposite Navios Maritime and Danaos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navios Maritime position performs unexpectedly, Danaos 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 Danaos will offset losses from the drop in Danaos' long position.| Navios Maritime vs. Global Ship Lease | Navios Maritime vs. Costamare | Navios Maritime vs. Genco Shipping Trading | Navios Maritime vs. Danaos |
| Danaos vs. Genco Shipping Trading | Danaos vs. Costamare | Danaos vs. Ardmore Shpng | Danaos vs. Global Ship Lease |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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