Correlation Between Martin Midstream and Teekay
Can any of the company-specific risk be diversified away by investing in both Martin Midstream 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 Martin Midstream and Teekay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martin Midstream Partners and Teekay, you can compare the effects of market volatilities on Martin Midstream 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 Martin Midstream with a short position of Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Midstream and Teekay.
Diversification Opportunities for Martin Midstream and Teekay
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and Teekay is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Martin Midstream Partners and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and Martin Midstream 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 Martin Midstream Partners 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 Martin Midstream i.e., Martin Midstream and Teekay go up and down completely randomly.
Pair Corralation between Martin Midstream and Teekay
Given the investment horizon of 90 days Martin Midstream Partners is expected to under-perform the Teekay. In addition to that, Martin Midstream is 1.24 times more volatile than Teekay. It trades about -0.18 of its total potential returns per unit of risk. Teekay is currently generating about 0.36 per unit of volatility. If you would invest 629.00 in Teekay on October 20, 2024 and sell it today you would earn a total of 113.00 from holding Teekay or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Midstream Partners vs. Teekay
Performance |
| Timeline |
| Martin Midstream Partners |
| Teekay |
Martin Midstream and Teekay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Midstream and Teekay
The main advantage of trading using opposite Martin Midstream and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Midstream 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.| Martin Midstream vs. Western Midstream Partners | Martin Midstream vs. EnLink Midstream LLC | Martin Midstream vs. Kinetik Holdings | Martin Midstream vs. NGL Energy Partners |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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