Correlation Between International Seaways and Plains GP
Can any of the company-specific risk be diversified away by investing in both International Seaways and Plains GP 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 Plains GP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and Plains GP Holdings, you can compare the effects of market volatilities on International Seaways and Plains GP 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 Plains GP. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and Plains GP.
Diversification Opportunities for International Seaways and Plains GP
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Plains is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and Plains GP Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plains GP Holdings 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 Plains GP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plains GP Holdings has no effect on the direction of International Seaways i.e., International Seaways and Plains GP go up and down completely randomly.
Pair Corralation between International Seaways and Plains GP
Given the investment horizon of 90 days International Seaways is expected to under-perform the Plains GP. In addition to that, International Seaways is 1.48 times more volatile than Plains GP Holdings. It trades about -0.17 of its total potential returns per unit of risk. Plains GP Holdings is currently generating about 0.1 per unit of volatility. If you would invest 1,854 in Plains GP Holdings on September 2, 2024 and sell it today you would earn a total of 148.00 from holding Plains GP Holdings or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Seaways vs. Plains GP Holdings
Performance |
| Timeline |
| International Seaways |
| Plains GP Holdings |
International Seaways and Plains GP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and Plains GP
The main advantage of trading using opposite International Seaways and Plains GP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, Plains GP 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 Plains GP will offset losses from the drop in Plains GP's long position.| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
| Plains GP vs. Targa Resources | Plains GP vs. Western Midstream Partners | Plains GP vs. MPLX LP | Plains GP vs. Plains All American |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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