Correlation Between MPLX LP and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both MPLX LP and Tsakos Energy 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 MPLX LP and Tsakos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPLX LP and Tsakos Energy Navigation, you can compare the effects of market volatilities on MPLX LP and Tsakos Energy 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 MPLX LP with a short position of Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLX LP and Tsakos Energy.
Diversification Opportunities for MPLX LP and Tsakos Energy
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPLX and Tsakos is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MPLX LP and Tsakos Energy Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsakos Energy Navigation and MPLX LP 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 MPLX LP are associated (or correlated) with Tsakos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsakos Energy Navigation has no effect on the direction of MPLX LP i.e., MPLX LP and Tsakos Energy go up and down completely randomly.
Pair Corralation between MPLX LP and Tsakos Energy
Given the investment horizon of 90 days MPLX LP is expected to generate 0.45 times more return on investment than Tsakos Energy. However, MPLX LP is 2.23 times less risky than Tsakos Energy. It trades about 0.18 of its potential returns per unit of risk. Tsakos Energy Navigation is currently generating about -0.02 per unit of risk. If you would invest 3,354 in MPLX LP on November 9, 2024 and sell it today you would earn a total of 2,001 from holding MPLX LP or generate 59.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPLX LP vs. Tsakos Energy Navigation
Performance |
| Timeline |
| MPLX LP |
| Tsakos Energy Navigation |
MPLX LP and Tsakos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPLX LP and Tsakos Energy
The main advantage of trading using opposite MPLX LP and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLX LP position performs unexpectedly, Tsakos Energy 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 Tsakos Energy will offset losses from the drop in Tsakos Energy's long position.| MPLX LP vs. ONEOK Inc | MPLX LP vs. Enterprise Products Partners | MPLX LP vs. Energy Transfer LP | MPLX LP vs. Plains All American |
| Tsakos Energy vs. Arm Holdings plc | Tsakos Energy vs. Amkor Technology | Tsakos Energy vs. Catalyst Metals Limited | Tsakos Energy vs. Nordic Semiconductor ASA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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