Correlation Between Dynagas LNG and TOP Ships
Can any of the company-specific risk be diversified away by investing in both Dynagas LNG and TOP Ships 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 TOP Ships 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 TOP Ships, you can compare the effects of market volatilities on Dynagas LNG and TOP Ships 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 TOP Ships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagas LNG and TOP Ships.
Diversification Opportunities for Dynagas LNG and TOP Ships
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dynagas and TOP is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dynagas LNG Partners and TOP Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOP Ships 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 TOP Ships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOP Ships has no effect on the direction of Dynagas LNG i.e., Dynagas LNG and TOP Ships go up and down completely randomly.
Pair Corralation between Dynagas LNG and TOP Ships
Assuming the 90 days trading horizon Dynagas LNG Partners is expected to generate 0.18 times more return on investment than TOP Ships. However, Dynagas LNG Partners is 5.53 times less risky than TOP Ships. It trades about 0.11 of its potential returns per unit of risk. TOP Ships is currently generating about -0.07 per unit of risk. If you would invest 2,478 in Dynagas LNG Partners on August 28, 2024 and sell it today you would earn a total of 79.00 from holding Dynagas LNG Partners or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dynagas LNG Partners vs. TOP Ships
Performance |
| Timeline |
| Dynagas LNG Partners |
| TOP Ships |
Dynagas LNG and TOP Ships Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynagas LNG and TOP Ships
The main advantage of trading using opposite Dynagas LNG and TOP Ships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynagas LNG position performs unexpectedly, TOP Ships 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 TOP Ships will offset losses from the drop in TOP Ships' 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 |
| TOP Ships vs. United Maritime | TOP Ships vs. Globus Maritime | TOP Ships vs. Castor Maritime | TOP Ships vs. Safe Bulkers |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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