Correlation Between Ardmore Shpng and Teekay Tankers
Can any of the company-specific risk be diversified away by investing in both Ardmore Shpng and Teekay Tankers 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 Ardmore Shpng and Teekay Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardmore Shpng and Teekay Tankers, you can compare the effects of market volatilities on Ardmore Shpng and Teekay Tankers 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 Ardmore Shpng with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardmore Shpng and Teekay Tankers.
Diversification Opportunities for Ardmore Shpng and Teekay Tankers
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ardmore and Teekay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ardmore Shpng and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers and Ardmore Shpng 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 Ardmore Shpng are associated (or correlated) with Teekay Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay Tankers has no effect on the direction of Ardmore Shpng i.e., Ardmore Shpng and Teekay Tankers go up and down completely randomly.
Pair Corralation between Ardmore Shpng and Teekay Tankers
Considering the 90-day investment horizon Ardmore Shpng is expected to under-perform the Teekay Tankers. In addition to that, Ardmore Shpng is 1.01 times more volatile than Teekay Tankers. It trades about -0.01 of its total potential returns per unit of risk. Teekay Tankers is currently generating about -0.01 per unit of volatility. If you would invest 4,573 in Teekay Tankers on September 2, 2024 and sell it today you would lose (548.00) from holding Teekay Tankers or give up 11.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardmore Shpng vs. Teekay Tankers
Performance |
| Timeline |
| Ardmore Shpng |
| Teekay Tankers |
Ardmore Shpng and Teekay Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardmore Shpng and Teekay Tankers
The main advantage of trading using opposite Ardmore Shpng and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardmore Shpng position performs unexpectedly, Teekay Tankers 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 Teekay Tankers will offset losses from the drop in Teekay Tankers' long position.| Ardmore Shpng vs. International Seaways | Ardmore Shpng vs. Scorpio Tankers | Ardmore Shpng vs. Dorian LPG | Ardmore Shpng vs. Teekay Tankers |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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