Correlation Between International Container and Navios Maritime

Can any of the company-specific risk be diversified away by investing in both International Container 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 International Container and Navios Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Container Terminal and Navios Maritime Partners, you can compare the effects of market volatilities on International Container 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 International Container with a short position of Navios Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Container and Navios Maritime.

Diversification Opportunities for International Container and Navios Maritime

0.71

Correlation Coefficient

International Container  Navios Maritime

Poor diversification

The 3 months correlation between International and Navios is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding International Container Termin 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 International Container 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 Container Terminal 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 International Container i.e., International Container and Navios Maritime go up and down completely randomly.

Pair Corralation between International Container and Navios Maritime

Assuming the 90 days horizon International Container Terminal is expected to generate 1.64 times more return on investment than Navios Maritime. However, International Container is 1.64 times more volatile than Navios Maritime Partners. It trades about -0.01 of its potential returns per unit of risk. Navios Maritime Partners is currently generating about -0.16 per unit of risk. If you would invest  690.00  in International Container Terminal on September 14, 2024 and sell it today you would lose (48.00) from holding International Container Terminal or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

International Container Termin  vs.  Navios Maritime Partners

International Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Container Terminal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, International Container is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Navios Maritime Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navios Maritime Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with International Container and Navios Maritime

The main advantage of trading using opposite International Container and Navios Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Container 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.

The idea behind International Container Terminal and Navios Maritime Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.