Correlation Between Tsakos Energy and Enbridge
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Enbridge 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 Enbridge 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 Enbridge, you can compare the effects of market volatilities on Tsakos Energy and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Enbridge.
Diversification Opportunities for Tsakos Energy and Enbridge
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsakos and Enbridge is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Enbridge go up and down completely randomly.
Pair Corralation between Tsakos Energy and Enbridge
Considering the 90-day investment horizon Tsakos Energy Navigation is expected to under-perform the Enbridge. In addition to that, Tsakos Energy is 2.35 times more volatile than Enbridge. It trades about -0.02 of its total potential returns per unit of risk. Enbridge is currently generating about 0.11 per unit of volatility. If you would invest 3,416 in Enbridge on November 9, 2024 and sell it today you would earn a total of 1,004 from holding Enbridge or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsakos Energy Navigation vs. Enbridge
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Enbridge |
Tsakos Energy and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Enbridge
The main advantage of trading using opposite Tsakos Energy and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Tsakos Energy vs. Arm Holdings plc | Tsakos Energy vs. Amkor Technology | Tsakos Energy vs. Catalyst Metals Limited | Tsakos Energy vs. Nordic Semiconductor ASA |
| Enbridge vs. Energy Transfer LP | Enbridge vs. Kinder Morgan | Enbridge vs. MPLX LP | Enbridge vs. Pembina Pipeline Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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