Correlation Between Eneti and Navios Maritime

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

By analyzing existing cross correlation between Eneti Inc and Navios Maritime Partners, you can compare the effects of market volatilities on Eneti and Navios Maritime 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 Eneti with a short position of Navios Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eneti and Navios Maritime.

Diversification Opportunities for Eneti and Navios Maritime

0.63

Correlation Coefficient

Eneti  Navios Maritime

Poor diversification

The 3 months correlation between Eneti and Navios is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eneti Inc and Navios Maritime Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navios Maritime Partners and Eneti 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 Eneti Inc are associated (or correlated) with Navios Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navios Maritime Partners has no effect on the direction of Eneti i.e., Eneti and Navios Maritime go up and down completely randomly.

Pair Corralation between Eneti and Navios Maritime

If you would invest  3,369  in Navios Maritime Partners on February 23, 2024 and sell it today you would earn a total of  1,495  from holding Navios Maritime Partners or generate 44.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Eneti Inc  vs.  Navios Maritime Partners

Eneti Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eneti Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eneti is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Navios Maritime Partners

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Navios Maritime Partners are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Navios Maritime displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eneti and Navios Maritime

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

The idea behind Eneti Inc and Navios Maritime Partners 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.