Correlation Between Global Partners and Scorpio Tankers
Can any of the company-specific risk be diversified away by investing in both Global Partners and Scorpio 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 Global Partners and Scorpio Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partners LP and Scorpio Tankers, you can compare the effects of market volatilities on Global Partners and Scorpio 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 Global Partners with a short position of Scorpio Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Scorpio Tankers.
Diversification Opportunities for Global Partners and Scorpio Tankers
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Scorpio is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Scorpio Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scorpio Tankers and Global Partners 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 Global Partners LP are associated (or correlated) with Scorpio Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scorpio Tankers has no effect on the direction of Global Partners i.e., Global Partners and Scorpio Tankers go up and down completely randomly.
Pair Corralation between Global Partners and Scorpio Tankers
Assuming the 90 days trading horizon Global Partners LP is expected to generate 0.17 times more return on investment than Scorpio Tankers. However, Global Partners LP is 5.83 times less risky than Scorpio Tankers. It trades about 0.23 of its potential returns per unit of risk. Scorpio Tankers is currently generating about -0.45 per unit of risk. If you would invest 2,576 in Global Partners LP on August 27, 2024 and sell it today you would earn a total of 34.00 from holding Global Partners LP or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Scorpio Tankers
Performance |
| Timeline |
| Global Partners LP |
| Scorpio Tankers |
Global Partners and Scorpio Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Scorpio Tankers
The main advantage of trading using opposite Global Partners and Scorpio Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners position performs unexpectedly, Scorpio 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 Scorpio Tankers will offset losses from the drop in Scorpio Tankers' long position.| Global Partners vs. GasLog Partners LP | Global Partners vs. GasLog Partners LP | Global Partners vs. Aquagold International | Global Partners vs. Morningstar Unconstrained Allocation |
| Scorpio Tankers vs. Teekay Tankers | Scorpio Tankers vs. Navigator Holdings | Scorpio Tankers vs. DHT Holdings | Scorpio Tankers vs. Frontline |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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