Correlation Between Teekay and Overseas Shipholding
Can any of the company-specific risk be diversified away by investing in both Teekay and Overseas Shipholding 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 Overseas Shipholding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and Overseas Shipholding Group, you can compare the effects of market volatilities on Teekay and Overseas Shipholding 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 Overseas Shipholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and Overseas Shipholding.
Diversification Opportunities for Teekay and Overseas Shipholding
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Teekay and Overseas is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Teekay and Overseas Shipholding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Shipholding 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 Overseas Shipholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Shipholding has no effect on the direction of Teekay i.e., Teekay and Overseas Shipholding go up and down completely randomly.
Pair Corralation between Teekay and Overseas Shipholding
If you would invest 745.00 in Teekay on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Teekay or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Teekay vs. Overseas Shipholding Group
Performance |
| Timeline |
| Teekay |
| Overseas Shipholding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Teekay and Overseas Shipholding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay and Overseas Shipholding
The main advantage of trading using opposite Teekay and Overseas Shipholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay position performs unexpectedly, Overseas Shipholding 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 Overseas Shipholding will offset losses from the drop in Overseas Shipholding's long position.| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
| Overseas Shipholding vs. Teekay | Overseas Shipholding vs. Frontline | Overseas Shipholding vs. Alexander Baldwin Holdings | Overseas Shipholding vs. Torm PLC Class |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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