Correlation Between TNP Old and Dorian LPG
Can any of the company-specific risk be diversified away by investing in both TNP Old and Dorian LPG 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 TNP Old and Dorian LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TNP Old and Dorian LPG, you can compare the effects of market volatilities on TNP Old and Dorian LPG 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 TNP Old with a short position of Dorian LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of TNP Old and Dorian LPG.
Diversification Opportunities for TNP Old and Dorian LPG
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TNP and Dorian is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding TNP Old and Dorian LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorian LPG and TNP Old 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 TNP Old are associated (or correlated) with Dorian LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorian LPG has no effect on the direction of TNP Old i.e., TNP Old and Dorian LPG go up and down completely randomly.
Pair Corralation between TNP Old and Dorian LPG
If you would invest 2,928 in TNP Old on November 2, 2024 and sell it today you would earn a total of 0.00 from holding TNP Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
TNP Old vs. Dorian LPG
Performance |
| Timeline |
| TNP Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dorian LPG |
TNP Old and Dorian LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TNP Old and Dorian LPG
The main advantage of trading using opposite TNP Old and Dorian LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TNP Old position performs unexpectedly, Dorian LPG 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 Dorian LPG will offset losses from the drop in Dorian LPG's long position.The idea behind TNP Old and Dorian LPG 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.| Dorian LPG vs. DHT Holdings | Dorian LPG vs. Scorpio Tankers | Dorian LPG vs. Teekay Tankers | Dorian LPG 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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