Correlation Between Teekay and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both Teekay and Cheniere Energy 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 Teekay and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and Cheniere Energy Partners, you can compare the effects of market volatilities on Teekay and Cheniere Energy 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 Teekay with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and Cheniere Energy.
Diversification Opportunities for Teekay and Cheniere Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teekay and Cheniere is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Teekay and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and Teekay 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 Teekay are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Teekay i.e., Teekay and Cheniere Energy go up and down completely randomly.
Pair Corralation between Teekay and Cheniere Energy
Allowing for the 90-day total investment horizon Teekay is expected to generate 1.75 times more return on investment than Cheniere Energy. However, Teekay is 1.75 times more volatile than Cheniere Energy Partners. It trades about 0.06 of its potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.07 per unit of risk. If you would invest 437.00 in Teekay on August 31, 2024 and sell it today you would earn a total of 301.00 from holding Teekay or generate 68.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teekay vs. Cheniere Energy Partners
Performance |
| Timeline |
| Teekay |
| Cheniere Energy Partners |
Teekay and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay and Cheniere Energy
The main advantage of trading using opposite Teekay and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Genesis Energy LP | Cheniere Energy vs. Western Midstream Partners | Cheniere Energy vs. Hess Midstream Partners |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |