Correlation Between Navios Maritime and StealthGas

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

Diversification Opportunities for Navios Maritime and StealthGas

0.96

Correlation Coefficient

Navios Maritime  StealthGas

Almost no diversification

The 3 months correlation between Navios and StealthGas is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and StealthGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StealthGas 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 StealthGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StealthGas has no effect on the direction of Navios Maritime i.e., Navios Maritime and StealthGas go up and down completely randomly.

Pair Corralation between Navios Maritime and StealthGas

Considering the 90-day investment horizon Navios Maritime Partners is expected to under-perform the StealthGas. In addition to that, Navios Maritime is 1.12 times more volatile than StealthGas. It trades about -0.23 of its total potential returns per unit of risk. StealthGas is currently generating about -0.19 per unit of volatility. If you would invest  604.00  in StealthGas on September 27, 2024 and sell it today you would lose (98.00) from holding StealthGas or give up 16.23% 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.  StealthGas

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.

StealthGas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StealthGas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Navios Maritime and StealthGas

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

The idea behind Navios Maritime Partners and StealthGas 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.