Correlation Between Navios Maritime and SFL
Can any of the company-specific risk be diversified away by investing in both Navios Maritime and SFL 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 SFL 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 SFL Corporation, you can compare the effects of market volatilities on Navios Maritime and SFL 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 SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navios Maritime and SFL.
Diversification Opportunities for Navios Maritime and SFL
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Navios and SFL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation 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 SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of Navios Maritime i.e., Navios Maritime and SFL go up and down completely randomly.
Pair Corralation between Navios Maritime and SFL
Considering the 90-day investment horizon Navios Maritime is expected to generate 1.2 times less return on investment than SFL. In addition to that, Navios Maritime is 1.9 times more volatile than SFL Corporation. It trades about 0.01 of its total potential returns per unit of risk. SFL Corporation is currently generating about 0.02 per unit of volatility. If you would invest 1,038 in SFL Corporation on November 3, 2024 and sell it today you would earn a total of 17.00 from holding SFL Corporation or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Navios Maritime Partners vs. SFL Corp.
Performance |
| Timeline |
| Navios Maritime Partners |
| SFL Corporation |
Navios Maritime and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navios Maritime and SFL
The main advantage of trading using opposite Navios Maritime and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navios Maritime position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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