Correlation Between Teekay Tankers and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both Teekay Tankers and Tsakos 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 Tankers and Tsakos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay Tankers and Tsakos Energy Navigation, you can compare the effects of market volatilities on Teekay Tankers and Tsakos 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 Tankers with a short position of Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay Tankers and Tsakos Energy.
Diversification Opportunities for Teekay Tankers and Tsakos Energy
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Teekay and Tsakos is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Teekay Tankers and Tsakos Energy Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsakos Energy Navigation and Teekay Tankers 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 Tankers are associated (or correlated) with Tsakos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsakos Energy Navigation has no effect on the direction of Teekay Tankers i.e., Teekay Tankers and Tsakos Energy go up and down completely randomly.
Pair Corralation between Teekay Tankers and Tsakos Energy
Considering the 90-day investment horizon Teekay Tankers is expected to under-perform the Tsakos Energy. In addition to that, Teekay Tankers is 1.04 times more volatile than Tsakos Energy Navigation. It trades about -0.03 of its total potential returns per unit of risk. Tsakos Energy Navigation is currently generating about -0.02 per unit of volatility. If you would invest 2,260 in Tsakos Energy Navigation on November 9, 2024 and sell it today you would lose (402.00) from holding Tsakos Energy Navigation or give up 17.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teekay Tankers vs. Tsakos Energy Navigation
Performance |
| Timeline |
| Teekay Tankers |
| Tsakos Energy Navigation |
Teekay Tankers and Tsakos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teekay Tankers and Tsakos Energy
The main advantage of trading using opposite Teekay Tankers and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay Tankers position performs unexpectedly, Tsakos 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 Tsakos Energy will offset losses from the drop in Tsakos Energy's long position.The idea behind Teekay Tankers and Tsakos Energy Navigation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tsakos Energy vs. Arm Holdings plc | Tsakos Energy vs. Amkor Technology | Tsakos Energy vs. Catalyst Metals Limited | Tsakos Energy vs. Nordic Semiconductor ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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