Correlation Between Teekay and FLEX LNG
Can any of the company-specific risk be diversified away by investing in both Teekay and FLEX LNG 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 FLEX LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and FLEX LNG, you can compare the effects of market volatilities on Teekay and FLEX LNG 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 FLEX LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and FLEX LNG.
Diversification Opportunities for Teekay and FLEX LNG
Very weak diversification
The 3 months correlation between Teekay and FLEX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Teekay and FLEX LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEX LNG 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 FLEX LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEX LNG has no effect on the direction of Teekay i.e., Teekay and FLEX LNG go up and down completely randomly.
Pair Corralation between Teekay and FLEX LNG
Allowing for the 90-day total investment horizon Teekay is expected to generate 1.8 times more return on investment than FLEX LNG. However, Teekay is 1.8 times more volatile than FLEX LNG. It trades about 0.08 of its potential returns per unit of risk. FLEX LNG is currently generating about 0.0 per unit of risk. If you would invest 324.00 in Teekay on August 27, 2024 and sell it today you would earn a total of 469.00 from holding Teekay or generate 144.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teekay vs. FLEX LNG
Performance |
| Timeline |
| Teekay |
| FLEX LNG |
Teekay and FLEX LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay and FLEX LNG
The main advantage of trading using opposite Teekay and FLEX LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay position performs unexpectedly, FLEX LNG 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 FLEX LNG will offset losses from the drop in FLEX LNG's long position.| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
| FLEX LNG vs. Ucommune International | FLEX LNG vs. Lion Financial Group | FLEX LNG vs. HUMANA INC | FLEX LNG vs. Aquagold International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |