Correlation Between Teekay and Seapeak LLC
Can any of the company-specific risk be diversified away by investing in both Teekay and Seapeak LLC 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 Seapeak LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and Seapeak LLC, you can compare the effects of market volatilities on Teekay and Seapeak LLC 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 Seapeak LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and Seapeak LLC.
Diversification Opportunities for Teekay and Seapeak LLC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teekay and Seapeak is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Teekay and Seapeak LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seapeak LLC 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 Seapeak LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seapeak LLC has no effect on the direction of Teekay i.e., Teekay and Seapeak LLC go up and down completely randomly.
Pair Corralation between Teekay and Seapeak LLC
Allowing for the 90-day total investment horizon Teekay is expected to generate 3.9 times more return on investment than Seapeak LLC. However, Teekay is 3.9 times more volatile than Seapeak LLC. It trades about 0.08 of its potential returns per unit of risk. Seapeak LLC is currently generating about 0.07 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teekay vs. Seapeak LLC
Performance |
| Timeline |
| Teekay |
| Seapeak LLC |
Teekay and Seapeak LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay and Seapeak LLC
The main advantage of trading using opposite Teekay and Seapeak LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay position performs unexpectedly, Seapeak LLC 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 Seapeak LLC will offset losses from the drop in Seapeak LLC's long position.| Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
| Seapeak LLC vs. Antero Midstream Partners | Seapeak LLC vs. Excelerate Energy | Seapeak LLC vs. Energy Transfer LP | Seapeak LLC vs. Teekay |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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