Correlation Between Global Partners and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both Global Partners and Tsakos Energy 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 Tsakos Energy 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 Tsakos Energy Navigation, you can compare the effects of market volatilities on Global Partners and Tsakos Energy 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 Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Tsakos Energy.
Diversification Opportunities for Global Partners and Tsakos Energy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Tsakos is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Tsakos Energy Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsakos Energy Navigation 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 Tsakos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsakos Energy Navigation has no effect on the direction of Global Partners i.e., Global Partners and Tsakos Energy go up and down completely randomly.
Pair Corralation between Global Partners and Tsakos Energy
Considering the 90-day investment horizon Global Partners LP is expected to generate 1.14 times more return on investment than Tsakos Energy. However, Global Partners is 1.14 times more volatile than Tsakos Energy Navigation. It trades about 0.06 of its potential returns per unit of risk. Tsakos Energy Navigation is currently generating about -0.16 per unit of risk. If you would invest 4,455 in Global Partners LP on August 24, 2024 and sell it today you would earn a total of 730.00 from holding Global Partners LP or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Tsakos Energy Navigation
Performance |
| Timeline |
| Global Partners LP |
| Tsakos Energy Navigation |
Global Partners and Tsakos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Tsakos Energy
The main advantage of trading using opposite Global Partners and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners position performs unexpectedly, Tsakos Energy 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 Tsakos Energy will offset losses from the drop in Tsakos Energy's long position.| Global Partners vs. Plains All American | Global Partners vs. Genesis Energy LP | Global Partners vs. Western Midstream Partners | Global Partners vs. Hess Midstream Partners |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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