Correlation Between Imperial Petroleum and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both Imperial Petroleum 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 Imperial Petroleum and Tsakos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Petroleum Preferred and Tsakos Energy Navigation, you can compare the effects of market volatilities on Imperial Petroleum 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 Imperial Petroleum with a short position of Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Petroleum and Tsakos Energy.
Diversification Opportunities for Imperial Petroleum and Tsakos Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Imperial and Tsakos is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Petroleum Preferred 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 Imperial Petroleum 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 Imperial Petroleum Preferred 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 Imperial Petroleum i.e., Imperial Petroleum and Tsakos Energy go up and down completely randomly.
Pair Corralation between Imperial Petroleum and Tsakos Energy
Assuming the 90 days horizon Imperial Petroleum Preferred is expected to generate 0.47 times more return on investment than Tsakos Energy. However, Imperial Petroleum Preferred is 2.13 times less risky than Tsakos Energy. It trades about 0.08 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 2,315 in Imperial Petroleum Preferred on August 24, 2024 and sell it today you would earn a total of 215.00 from holding Imperial Petroleum Preferred or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Petroleum Preferred vs. Tsakos Energy Navigation
Performance |
| Timeline |
| Imperial Petroleum |
| Tsakos Energy Navigation |
Imperial Petroleum and Tsakos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Petroleum and Tsakos Energy
The main advantage of trading using opposite Imperial Petroleum and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Petroleum 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.| Imperial Petroleum vs. Imperial Petroleum | Imperial Petroleum vs. Dynagas LNG Partners | Imperial Petroleum vs. GasLog Partners LP | Imperial Petroleum vs. GasLog Partners LP |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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