Correlation Between Castor Maritime and Teekay Tankers
Can any of the company-specific risk be diversified away by investing in both Castor Maritime and Teekay Tankers 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 Castor Maritime and Teekay Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castor Maritime and Teekay Tankers, you can compare the effects of market volatilities on Castor Maritime and Teekay Tankers 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 Castor Maritime with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castor Maritime and Teekay Tankers.
Diversification Opportunities for Castor Maritime and Teekay Tankers
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Castor and Teekay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers and Castor Maritime 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 Castor Maritime are associated (or correlated) with Teekay Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay Tankers has no effect on the direction of Castor Maritime i.e., Castor Maritime and Teekay Tankers go up and down completely randomly.
Pair Corralation between Castor Maritime and Teekay Tankers
Given the investment horizon of 90 days Castor Maritime is expected to under-perform the Teekay Tankers. In addition to that, Castor Maritime is 1.7 times more volatile than Teekay Tankers. It trades about -0.29 of its total potential returns per unit of risk. Teekay Tankers is currently generating about -0.13 per unit of volatility. If you would invest 4,152 in Teekay Tankers on September 24, 2024 and sell it today you would lose (243.00) from holding Teekay Tankers or give up 5.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Castor Maritime vs. Teekay Tankers
Performance |
Timeline |
Castor Maritime |
Teekay Tankers |
Castor Maritime and Teekay Tankers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Castor Maritime and Teekay Tankers
The main advantage of trading using opposite Castor Maritime and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castor Maritime position performs unexpectedly, Teekay Tankers 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 Teekay Tankers will offset losses from the drop in Teekay Tankers' long position.Castor Maritime vs. Pyxis Tankers | Castor Maritime vs. Pacific Basin Shipping | Castor Maritime vs. dAmico International Shipping | Castor Maritime vs. Danaos |
Teekay Tankers vs. United Maritime | Teekay Tankers vs. Globus Maritime | Teekay Tankers vs. Castor Maritime | Teekay Tankers vs. Safe Bulkers |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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