Correlation Between NYSE Composite and Teekay Tankers
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Teekay Tankers 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 NYSE Composite and Teekay Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Teekay Tankers, you can compare the effects of market volatilities on NYSE Composite and Teekay Tankers 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 NYSE Composite with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Teekay Tankers.
Diversification Opportunities for NYSE Composite and Teekay Tankers
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Teekay is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers and NYSE Composite 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 NYSE Composite are associated (or correlated) with Teekay Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay Tankers has no effect on the direction of NYSE Composite i.e., NYSE Composite and Teekay Tankers go up and down completely randomly.
Pair Corralation between NYSE Composite and Teekay Tankers
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.51 times more return on investment than Teekay Tankers. However, NYSE Composite is 1.97 times less risky than Teekay Tankers. It trades about 0.24 of its potential returns per unit of risk. Teekay Tankers is currently generating about -0.59 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Teekay Tankers
Performance |
| Timeline |
NYSE Composite and Teekay Tankers Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Teekay Tankers
Pair trading matchups for Teekay Tankers
Pair Trading with NYSE Composite and Teekay Tankers
The main advantage of trading using opposite NYSE Composite and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Teekay Tankers 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 Tankers will offset losses from the drop in Teekay Tankers' long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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