Correlation Between Dynagas LNG and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both Dynagas LNG 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 Dynagas LNG and Tsakos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynagas LNG Partners and Tsakos Energy Navigation, you can compare the effects of market volatilities on Dynagas LNG 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 Dynagas LNG with a short position of Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagas LNG and Tsakos Energy.
Diversification Opportunities for Dynagas LNG and Tsakos Energy
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dynagas and Tsakos is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dynagas LNG Partners 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 Dynagas LNG 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 Dynagas LNG Partners 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 Dynagas LNG i.e., Dynagas LNG and Tsakos Energy go up and down completely randomly.
Pair Corralation between Dynagas LNG and Tsakos Energy
Given the investment horizon of 90 days Dynagas LNG Partners is expected to generate 1.28 times more return on investment than Tsakos Energy. However, Dynagas LNG is 1.28 times more volatile than Tsakos Energy Navigation. It trades about 0.17 of its potential returns per unit of risk. Tsakos Energy Navigation is currently generating about -0.15 per unit of risk. If you would invest 480.00 in Dynagas LNG Partners on September 25, 2024 and sell it today you would earn a total of 53.00 from holding Dynagas LNG Partners or generate 11.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dynagas LNG Partners vs. Tsakos Energy Navigation
Performance |
Timeline |
Dynagas LNG Partners |
Tsakos Energy Navigation |
Dynagas LNG and Tsakos Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dynagas LNG and Tsakos Energy
The main advantage of trading using opposite Dynagas LNG and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynagas LNG 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.Dynagas LNG vs. United Maritime | Dynagas LNG vs. Globus Maritime | Dynagas LNG vs. Castor Maritime | Dynagas LNG vs. Safe Bulkers |
Tsakos Energy vs. United Maritime | Tsakos Energy vs. Globus Maritime | Tsakos Energy vs. Castor Maritime | Tsakos Energy 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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