Correlation Between Navios Maritime and International Container

Can any of the company-specific risk be diversified away by investing in both Navios Maritime and International Container 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 International Container 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 International Container Terminal, you can compare the effects of market volatilities on Navios Maritime and International Container 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 International Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navios Maritime and International Container.

Diversification Opportunities for Navios Maritime and International Container

0.71

Correlation Coefficient

Navios Maritime  International Container

Poor diversification

The 3 months correlation between Navios and International is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and International Container Termin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Container 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 International Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Container has no effect on the direction of Navios Maritime i.e., Navios Maritime and International Container go up and down completely randomly.

Pair Corralation between Navios Maritime and International Container

Considering the 90-day investment horizon Navios Maritime Partners is expected to under-perform the International Container. But the stock apears to be less risky and, when comparing its historical volatility, Navios Maritime Partners is 1.64 times less risky than International Container. The stock trades about -0.16 of its potential returns per unit of risk. The International Container Terminal is currently generating about -0.01 of returns per unit of risk over similar time horizon. 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

Navios Maritime Partners  vs.  International Container Termin

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.

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.

Pair Trading with Navios Maritime and International Container

The main advantage of trading using opposite Navios Maritime and International Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navios Maritime position performs unexpectedly, International Container 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 International Container will offset losses from the drop in International Container's long position.

The idea behind Navios Maritime Partners and International Container Terminal 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.