Correlation Between Teekay and Global Partners
Can any of the company-specific risk be diversified away by investing in both Teekay 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 Teekay and Global Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and Global Partners LP, you can compare the effects of market volatilities on Teekay 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 Teekay with a short position of Global Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and Global Partners.
Diversification Opportunities for Teekay and Global Partners
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teekay and Global is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Teekay 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 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 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 Teekay i.e., Teekay and Global Partners go up and down completely randomly.
Pair Corralation between Teekay and Global Partners
Allowing for the 90-day total investment horizon Teekay is expected to generate 1.36 times more return on investment than Global Partners. However, Teekay is 1.36 times more volatile than Global Partners LP. It trades about 0.05 of its potential returns per unit of risk. Global Partners LP is currently generating about 0.05 per unit of risk. If you would invest 542.00 in Teekay on November 3, 2024 and sell it today you would earn a total of 172.00 from holding Teekay or generate 31.73% 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. Global Partners LP
Performance |
| Timeline |
| Teekay |
| Global Partners LP |
Teekay and Global Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay and Global Partners
The main advantage of trading using opposite Teekay and Global Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay 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.| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
| Global Partners vs. Plains All American | Global Partners vs. Genesis Energy LP | Global Partners vs. Western Midstream Partners | Global Partners 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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