Correlation Between Navios Maritime and Safe Bulkers

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

Diversification Opportunities for Navios Maritime and Safe Bulkers

-0.26

Correlation Coefficient

Navios Maritime  Safe Bulkers

Very good diversification

The 3 months correlation between Navios and Safe is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Navios Maritime Partners and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Navios Maritime i.e., Navios Maritime and Safe Bulkers go up and down completely randomly.

Pair Corralation between Navios Maritime and Safe Bulkers

Considering the 90-day investment horizon Navios Maritime Partners is expected to under-perform the Safe Bulkers. In addition to that, Navios Maritime is 5.51 times more volatile than Safe Bulkers. It trades about -0.04 of its total potential returns per unit of risk. Safe Bulkers is currently generating about 0.05 per unit of volatility. If you would invest  2,511  in Safe Bulkers on September 3, 2024 and sell it today you would earn a total of  31.00  from holding Safe Bulkers or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Navios Maritime Partners  vs.  Safe Bulkers

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 very healthy primary indicators, Navios Maritime is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Safe Bulkers

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Safe Bulkers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Navios Maritime and Safe Bulkers

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

The idea behind Navios Maritime Partners and Safe Bulkers 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.