Correlation Between Tsakos Energy and Cool
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Cool 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 Tsakos Energy and Cool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsakos Energy Navigation and Cool Company, you can compare the effects of market volatilities on Tsakos Energy and Cool 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 Tsakos Energy with a short position of Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Cool.
Diversification Opportunities for Tsakos Energy and Cool
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tsakos and Cool is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company and Tsakos Energy 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 Tsakos Energy Navigation are associated (or correlated) with Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Cool go up and down completely randomly.
Pair Corralation between Tsakos Energy and Cool
Considering the 90-day investment horizon Tsakos Energy Navigation is expected to generate 0.47 times more return on investment than Cool. However, Tsakos Energy Navigation is 2.11 times less risky than Cool. It trades about -0.37 of its potential returns per unit of risk. Cool Company is currently generating about -0.28 per unit of risk. If you would invest 2,268 in Tsakos Energy Navigation on August 28, 2024 and sell it today you would lose (281.00) from holding Tsakos Energy Navigation or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsakos Energy Navigation vs. Cool Company
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Cool Company |
Tsakos Energy and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Cool
The main advantage of trading using opposite Tsakos Energy and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.| Tsakos Energy vs. Arrow Electronics | Tsakos Energy vs. Amkor Technology | Tsakos Energy vs. Mind Technology | Tsakos Energy vs. Paiute Oil Mining |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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