Correlation Between Brooge Holdings and Teekay
Can any of the company-specific risk be diversified away by investing in both Brooge Holdings and Teekay 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 Brooge Holdings and Teekay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooge Holdings and Teekay, you can compare the effects of market volatilities on Brooge Holdings and Teekay 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 Brooge Holdings with a short position of Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Holdings and Teekay.
Diversification Opportunities for Brooge Holdings and Teekay
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brooge and Teekay is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Holdings and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and Brooge 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 Brooge Holdings are associated (or correlated) with Teekay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay has no effect on the direction of Brooge Holdings i.e., Brooge Holdings and Teekay go up and down completely randomly.
Pair Corralation between Brooge Holdings and Teekay
Given the investment horizon of 90 days Brooge Holdings is expected to generate 2.72 times more return on investment than Teekay. However, Brooge Holdings is 2.72 times more volatile than Teekay. It trades about 0.08 of its potential returns per unit of risk. Teekay is currently generating about -0.08 per unit of risk. If you would invest 90.00 in Brooge Holdings on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Brooge Holdings or generate 46.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brooge Holdings vs. Teekay
Performance |
| Timeline |
| Brooge Holdings |
| Teekay |
Brooge Holdings and Teekay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brooge Holdings and Teekay
The main advantage of trading using opposite Brooge Holdings and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Holdings position performs unexpectedly, Teekay 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 will offset losses from the drop in Teekay's long position.| Brooge Holdings vs. Teekay | Brooge Holdings vs. Targa Resources | Brooge Holdings vs. Teekay Tankers | Brooge Holdings vs. Dynagas LNG Partners |
| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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