Correlation Between Tsakos Energy and Global Partners
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Global Partners 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 Global Partners 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 Global Partners LP, you can compare the effects of market volatilities on Tsakos Energy and Global Partners 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 Global Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Global Partners.
Diversification Opportunities for Tsakos Energy and Global Partners
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tsakos and Global is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP 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 Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Global Partners go up and down completely randomly.
Pair Corralation between Tsakos Energy and Global Partners
Considering the 90-day investment horizon Tsakos Energy Navigation is expected to under-perform the Global Partners. But the stock apears to be less risky and, when comparing its historical volatility, Tsakos Energy Navigation is 1.09 times less risky than Global Partners. The stock trades about -0.03 of its potential returns per unit of risk. The Global Partners LP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,244 in Global Partners LP on November 3, 2024 and sell it today you would earn a total of 1,174 from holding Global Partners LP or generate 27.66% 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. Global Partners LP
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Global Partners LP |
Tsakos Energy and Global Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Global Partners
The main advantage of trading using opposite Tsakos Energy and Global Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Global Partners 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 Global Partners will offset losses from the drop in Global Partners' long position.| Tsakos Energy vs. Vodka Brands Corp | Tsakos Energy vs. PepsiCo | Tsakos Energy vs. Imax Corp | Tsakos Energy vs. Naked Wines plc |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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