Correlation Between International Seaways and Nordic American
Can any of the company-specific risk be diversified away by investing in both International Seaways and Nordic American 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 International Seaways and Nordic American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and Nordic American Tankers, you can compare the effects of market volatilities on International Seaways and Nordic American 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 International Seaways with a short position of Nordic American. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and Nordic American.
Diversification Opportunities for International Seaways and Nordic American
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Nordic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and Nordic American Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic American Tankers and International Seaways 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 International Seaways are associated (or correlated) with Nordic American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic American Tankers has no effect on the direction of International Seaways i.e., International Seaways and Nordic American go up and down completely randomly.
Pair Corralation between International Seaways and Nordic American
Given the investment horizon of 90 days International Seaways is expected to generate 0.73 times more return on investment than Nordic American. However, International Seaways is 1.37 times less risky than Nordic American. It trades about -0.25 of its potential returns per unit of risk. Nordic American Tankers is currently generating about -0.25 per unit of risk. If you would invest 4,508 in International Seaways on August 24, 2024 and sell it today you would lose (373.00) from holding International Seaways or give up 8.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Seaways vs. Nordic American Tankers
Performance |
| Timeline |
| International Seaways |
| Nordic American Tankers |
International Seaways and Nordic American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and Nordic American
The main advantage of trading using opposite International Seaways and Nordic American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, Nordic American 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 Nordic American will offset losses from the drop in Nordic American's long position.| International Seaways vs. Scorpio Tankers | International Seaways vs. DHT Holdings | International Seaways vs. Teekay | International Seaways vs. HUMANA INC |
| Nordic American vs. Genco Shipping Trading | Nordic American vs. Golden Ocean Group | Nordic American vs. Star Bulk Carriers | Nordic American vs. Oceanpal |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |