Correlation Between Navios Maritime and Caravelle International

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

Diversification Opportunities for Navios Maritime and Caravelle International

-0.92

Correlation Coefficient

Navios Maritime  Caravelle International

Pay attention - limited upside

The 3 months correlation between Navios and Caravelle is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Navios Maritime i.e., Navios Maritime and Caravelle International go up and down completely randomly.

Pair Corralation between Navios Maritime and Caravelle International

Considering the 90-day investment horizon Navios Maritime is expected to generate 3.99 times less return on investment than Caravelle International. But when comparing it to its historical volatility, Navios Maritime Partners is 3.75 times less risky than Caravelle International. It trades about 0.09 of its potential returns per unit of risk. Caravelle International Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Caravelle International Group on September 27, 2024 and sell it today you would earn a total of  191.00  from holding Caravelle International Group or generate 308.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.63%
Values	Daily Returns

Navios Maritime Partners  vs.  Caravelle International Group

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.

Caravelle International

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Navios Maritime and Caravelle International

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

The idea behind Navios Maritime Partners and Caravelle International Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.