Correlation Between International Seaways and TransAtlantic Petroleum
Can any of the company-specific risk be diversified away by investing in both International Seaways and TransAtlantic Petroleum 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 TransAtlantic Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and TransAtlantic Petroleum, you can compare the effects of market volatilities on International Seaways and TransAtlantic Petroleum 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 TransAtlantic Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and TransAtlantic Petroleum.
Diversification Opportunities for International Seaways and TransAtlantic Petroleum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and TransAtlantic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and TransAtlantic Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAtlantic Petroleum 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 TransAtlantic Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAtlantic Petroleum has no effect on the direction of International Seaways i.e., International Seaways and TransAtlantic Petroleum go up and down completely randomly.
Pair Corralation between International Seaways and TransAtlantic Petroleum
Given the investment horizon of 90 days International Seaways is expected to generate 2.45 times less return on investment than TransAtlantic Petroleum. But when comparing it to its historical volatility, International Seaways is 1.16 times less risky than TransAtlantic Petroleum. It trades about 0.03 of its potential returns per unit of risk. TransAtlantic Petroleum is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,688 in TransAtlantic Petroleum on August 24, 2024 and sell it today you would earn a total of 1,240 from holding TransAtlantic Petroleum or generate 73.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.44% |
| Values | Daily Returns |
International Seaways vs. TransAtlantic Petroleum
Performance |
| Timeline |
| International Seaways |
| TransAtlantic Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Seaways and TransAtlantic Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and TransAtlantic Petroleum
The main advantage of trading using opposite International Seaways and TransAtlantic Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, TransAtlantic Petroleum 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 TransAtlantic Petroleum will offset losses from the drop in TransAtlantic Petroleum's long position.| International Seaways vs. Scorpio Tankers | International Seaways vs. DHT Holdings | International Seaways vs. Teekay | International Seaways vs. HUMANA INC |
| TransAtlantic Petroleum vs. Teekay | TransAtlantic Petroleum vs. Teekay Tankers | TransAtlantic Petroleum vs. DHT Holdings | TransAtlantic Petroleum vs. Frontline |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |