Correlation Between Tsakos Energy and Martin Midstream
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Martin Midstream 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 Martin Midstream 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 Martin Midstream Partners, you can compare the effects of market volatilities on Tsakos Energy and Martin Midstream 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 Martin Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Martin Midstream.
Diversification Opportunities for Tsakos Energy and Martin Midstream
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tsakos and Martin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Martin Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Midstream Partners 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 Martin Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Midstream Partners has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Martin Midstream go up and down completely randomly.
Pair Corralation between Tsakos Energy and Martin Midstream
Considering the 90-day investment horizon Tsakos Energy Navigation is expected to under-perform the Martin Midstream. In addition to that, Tsakos Energy is 4.94 times more volatile than Martin Midstream Partners. It trades about -0.38 of its total potential returns per unit of risk. Martin Midstream Partners is currently generating about 0.0 per unit of volatility. If you would invest 399.00 in Martin Midstream Partners on August 23, 2024 and sell it today you would earn a total of 0.00 from holding Martin Midstream Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsakos Energy Navigation vs. Martin Midstream Partners
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Martin Midstream Partners |
Tsakos Energy and Martin Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Martin Midstream
The main advantage of trading using opposite Tsakos Energy and Martin Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Martin Midstream 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 Martin Midstream will offset losses from the drop in Martin Midstream's long position.| Tsakos Energy vs. Triton International Limited | Tsakos Energy vs. Mediag3 | Tsakos Energy vs. Herc Holdings | Tsakos Energy vs. Universal |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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