Correlation Between Tortoise North and VanEck Oil

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Can any of the company-specific risk be diversified away by investing in both Tortoise North and VanEck Oil 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 Tortoise North and VanEck Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tortoise North American and VanEck Oil Refiners, you can compare the effects of market volatilities on Tortoise North and VanEck Oil 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 Tortoise North with a short position of VanEck Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tortoise North and VanEck Oil.

Diversification Opportunities for Tortoise North and VanEck Oil

TortoiseVanEckDiversified AwayTortoiseVanEckDiversified Away100%
0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Tortoise and VanEck is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tortoise North American and VanEck Oil Refiners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Oil Refiners and Tortoise North 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 Tortoise North American are associated (or correlated) with VanEck Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Oil Refiners has no effect on the direction of Tortoise North i.e., Tortoise North and VanEck Oil go up and down completely randomly.

Pair Corralation between Tortoise North and VanEck Oil

Given the investment horizon of 90 days Tortoise North American is expected to under-perform the VanEck Oil. In addition to that, Tortoise North is 1.21 times more volatile than VanEck Oil Refiners. It trades about -0.1 of its total potential returns per unit of risk. VanEck Oil Refiners is currently generating about -0.05 per unit of volatility. If you would invest  2,915  in VanEck Oil Refiners on November 25, 2024 and sell it today you would lose (35.00) from holding VanEck Oil Refiners or give up 1.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Tortoise North American  vs.  VanEck Oil Refiners

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15TPYP CRAK
       Timeline  
Tortoise North American 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Tortoise North American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Tortoise North is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3334353637
VanEck Oil Refiners 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days VanEck Oil Refiners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, VanEck Oil is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2727.52828.52929.530

Tortoise North and VanEck Oil Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.89-2.91-1.94-0.96-0.01630.961.962.963.954.95 0.10.20.30.4
JavaScript chart by amCharts 3.21.15TPYP CRAK
       Returns  

Pair Trading with Tortoise North and VanEck Oil

The main advantage of trading using opposite Tortoise North and VanEck Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tortoise North position performs unexpectedly, VanEck Oil 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 VanEck Oil will offset losses from the drop in VanEck Oil's long position.
The idea behind Tortoise North American and VanEck Oil Refiners 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.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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