Correlation Between Navigator Holdings and International Seaways

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

By analyzing existing cross correlation between Navigator Holdings and International Seaways, you can compare the effects of market volatilities on Navigator Holdings and International Seaways 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 Navigator Holdings with a short position of International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Holdings and International Seaways.

Diversification Opportunities for Navigator Holdings and International Seaways

0.77

Correlation Coefficient

Navigator Holdings  International Seaways

Poor diversification

The 3 months correlation between Navigator and International is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Holdings and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways and Navigator Holdings 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 Navigator Holdings are associated (or correlated) with International Seaways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Seaways has no effect on the direction of Navigator Holdings i.e., Navigator Holdings and International Seaways go up and down completely randomly.

Pair Corralation between Navigator Holdings and International Seaways

Given the investment horizon of 90 days Navigator Holdings is expected to generate 0.66 times more return on investment than International Seaways. However, Navigator Holdings is 1.52 times less risky than International Seaways. It trades about 0.02 of its potential returns per unit of risk. International Seaways is currently generating about -0.16 per unit of risk. If you would invest  1,615  in Navigator Holdings on October 10, 2024 and sell it today you would earn a total of  22.00  from holding Navigator Holdings or generate 1.36% return on investment over 90 days.

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

Navigator Holdings  vs.  International Seaways

Navigator Holdings

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Navigator Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

International Seaways

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Seaways 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 basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Navigator Holdings and International Seaways

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

The idea behind Navigator Holdings and International Seaways 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.