Correlation Between Overseas Shipholding and Teekay
Can any of the company-specific risk be diversified away by investing in both Overseas Shipholding 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 Overseas Shipholding and Teekay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Overseas Shipholding Group and Teekay, you can compare the effects of market volatilities on Overseas Shipholding 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 Overseas Shipholding with a short position of Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overseas Shipholding and Teekay.
Diversification Opportunities for Overseas Shipholding and Teekay
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Overseas and Teekay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Overseas Shipholding Group and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and Overseas Shipholding 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 Overseas Shipholding Group 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 Overseas Shipholding i.e., Overseas Shipholding and Teekay go up and down completely randomly.
Pair Corralation between Overseas Shipholding and Teekay
If you would invest 763.00 in Teekay on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Teekay or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Overseas Shipholding Group vs. Teekay
Performance |
| Timeline |
| Overseas Shipholding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Teekay |
Overseas Shipholding and Teekay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Overseas Shipholding and Teekay
The main advantage of trading using opposite Overseas Shipholding and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Overseas Shipholding 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.| Overseas Shipholding vs. Teekay | Overseas Shipholding vs. Frontline | Overseas Shipholding vs. Alexander Baldwin Holdings | Overseas Shipholding vs. Torm PLC Class |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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