Correlation Between Scorpio Tankers and DHT Holdings
Can any of the company-specific risk be diversified away by investing in both Scorpio Tankers and DHT Holdings 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 Scorpio Tankers and DHT Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scorpio Tankers and DHT Holdings, you can compare the effects of market volatilities on Scorpio Tankers and DHT Holdings 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 Scorpio Tankers with a short position of DHT Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scorpio Tankers and DHT Holdings.
Diversification Opportunities for Scorpio Tankers and DHT Holdings
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scorpio and DHT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scorpio Tankers and DHT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHT Holdings and Scorpio Tankers 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 Scorpio Tankers are associated (or correlated) with DHT Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHT Holdings has no effect on the direction of Scorpio Tankers i.e., Scorpio Tankers and DHT Holdings go up and down completely randomly.
Pair Corralation between Scorpio Tankers and DHT Holdings
Given the investment horizon of 90 days Scorpio Tankers is expected to generate 1.66 times less return on investment than DHT Holdings. In addition to that, Scorpio Tankers is 1.05 times more volatile than DHT Holdings. It trades about 0.2 of its total potential returns per unit of risk. DHT Holdings is currently generating about 0.35 per unit of volatility. If you would invest 889.00 in DHT Holdings on October 20, 2024 and sell it today you would earn a total of 187.00 from holding DHT Holdings or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scorpio Tankers vs. DHT Holdings
Performance |
| Timeline |
| Scorpio Tankers |
| DHT Holdings |
Scorpio Tankers and DHT Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scorpio Tankers and DHT Holdings
The main advantage of trading using opposite Scorpio Tankers and DHT Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scorpio Tankers position performs unexpectedly, DHT Holdings 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 DHT Holdings will offset losses from the drop in DHT Holdings' long position.| Scorpio Tankers vs. Teekay Tankers | Scorpio Tankers vs. Navigator Holdings | Scorpio Tankers vs. DHT Holdings | Scorpio Tankers vs. Frontline |
| DHT Holdings vs. Teekay Tankers | DHT Holdings vs. Frontline | DHT Holdings vs. International Seaways | DHT Holdings vs. Scorpio Tankers |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |