Correlation Between Dynagas LNG and International Seaways
Can any of the company-specific risk be diversified away by investing in both Dynagas LNG 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 Dynagas LNG and International Seaways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynagas LNG Partners and International Seaways, you can compare the effects of market volatilities on Dynagas LNG 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 Dynagas LNG with a short position of International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagas LNG and International Seaways.
Diversification Opportunities for Dynagas LNG and International Seaways
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dynagas and International is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dynagas LNG Partners and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways and Dynagas LNG 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 Dynagas LNG Partners 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 Dynagas LNG i.e., Dynagas LNG and International Seaways go up and down completely randomly.
Pair Corralation between Dynagas LNG and International Seaways
Assuming the 90 days trading horizon Dynagas LNG is expected to generate 1.24 times less return on investment than International Seaways. But when comparing it to its historical volatility, Dynagas LNG Partners is 2.91 times less risky than International Seaways. It trades about 0.08 of its potential returns per unit of risk. International Seaways is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,154 in International Seaways on September 12, 2024 and sell it today you would earn a total of 569.00 from holding International Seaways or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Dynagas LNG Partners vs. International Seaways
Performance |
| Timeline |
| Dynagas LNG Partners |
| International Seaways |
Dynagas LNG and International Seaways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynagas LNG and International Seaways
The main advantage of trading using opposite Dynagas LNG and International Seaways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynagas LNG 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.| Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Dynagas LNG Partners | Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Seapeak LLC |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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