Correlation Between Navios Maritime and DAmico International

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

Diversification Opportunities for Navios Maritime and DAmico International

0.95

Correlation Coefficient

Navios Maritime  DAmico International

Almost no diversification

The 3 months correlation between Navios and DAmico is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International 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 DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of Navios Maritime i.e., Navios Maritime and DAmico International go up and down completely randomly.

Pair Corralation between Navios Maritime and DAmico International

Considering the 90-day investment horizon Navios Maritime Partners is expected to generate 0.97 times more return on investment than DAmico International. However, Navios Maritime Partners is 1.03 times less risky than DAmico International. It trades about -0.23 of its potential returns per unit of risk. dAmico International Shipping is currently generating about -0.26 per unit of risk. If you would invest  5,655  in Navios Maritime Partners on September 26, 2024 and sell it today you would lose (1,203) from holding Navios Maritime Partners or give up 21.27% of portfolio value over 90 days.

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

Navios Maritime Partners  vs.  dAmico International Shipping

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.

dAmico International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days dAmico International Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Navios Maritime and DAmico International

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

The idea behind Navios Maritime Partners and dAmico International Shipping 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.