Correlation Between Matson and Navios Maritime

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

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

Diversification Opportunities for Matson and Navios Maritime

0.63

Correlation Coefficient

Matson  Navios Maritime

Poor diversification

The 3 months correlation between Matson and Navios is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Matson Inc 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 Matson 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 Matson Inc 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 Matson i.e., Matson and Navios Maritime go up and down completely randomly.

Pair Corralation between Matson and Navios Maritime

Given the investment horizon of 90 days Matson Inc is expected to generate 0.84 times more return on investment than Navios Maritime. However, Matson Inc is 1.19 times less risky than Navios Maritime. It trades about -0.03 of its potential returns per unit of risk. Navios Maritime Partners is currently generating about -0.06 per unit of risk. If you would invest  13,523  in Matson Inc on December 28, 2024 and sell it today you would lose (461.00) from holding Matson Inc or give up 3.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Matson Inc  vs.  Navios Maritime Partners

Matson Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matson Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Matson is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Navios Maritime Partners

Risk-Adjusted Performance

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 latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Matson and Navios Maritime

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

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 Anywhere module to track or share privately all of your investments from the convenience of any device.