Correlation Between Imperial Petroleum and Teekay
Can any of the company-specific risk be diversified away by investing in both Imperial Petroleum and Teekay 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 Teekay 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 Teekay, you can compare the effects of market volatilities on Imperial Petroleum and Teekay 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 Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Petroleum and Teekay.
Diversification Opportunities for Imperial Petroleum and Teekay
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Imperial and Teekay is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Petroleum Preferred and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay 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 Teekay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay has no effect on the direction of Imperial Petroleum i.e., Imperial Petroleum and Teekay go up and down completely randomly.
Pair Corralation between Imperial Petroleum and Teekay
Assuming the 90 days horizon Imperial Petroleum is expected to generate 2.16 times less return on investment than Teekay. But when comparing it to its historical volatility, Imperial Petroleum Preferred is 2.14 times less risky than Teekay. It trades about 0.08 of its potential returns per unit of risk. Teekay is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 324.00 in Teekay on August 27, 2024 and sell it today you would earn a total of 469.00 from holding Teekay or generate 144.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Petroleum Preferred vs. Teekay
Performance |
| Timeline |
| Imperial Petroleum |
| Teekay |
Imperial Petroleum and Teekay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Petroleum and Teekay
The main advantage of trading using opposite Imperial Petroleum and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Petroleum position performs unexpectedly, Teekay 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 Teekay will offset losses from the drop in Teekay'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 |
| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |