Correlation Between Seapeak LLC and ONEOK

Can any of the company-specific risk be diversified away by investing in both Seapeak LLC and ONEOK 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 Seapeak LLC and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seapeak LLC and ONEOK Inc, you can compare the effects of market volatilities on Seapeak LLC and ONEOK 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 Seapeak LLC with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seapeak LLC and ONEOK.

Diversification Opportunities for Seapeak LLC and ONEOK

0.44

Correlation Coefficient

Seapeak LLC  ONEOK

Very weak diversification

The 3 months correlation between Seapeak and ONEOK is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Seapeak LLC and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Seapeak LLC 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 Seapeak LLC are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Seapeak LLC i.e., Seapeak LLC and ONEOK go up and down completely randomly.

Pair Corralation between Seapeak LLC and ONEOK

Assuming the 90 days trading horizon Seapeak LLC is expected to generate 0.23 times more return on investment than ONEOK. However, Seapeak LLC is 4.27 times less risky than ONEOK. It trades about 0.04 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.29 per unit of risk. If you would invest  2,564  in Seapeak LLC on September 25, 2024 and sell it today you would earn a total of  8.00  from holding Seapeak LLC or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Seapeak LLC  vs.  ONEOK Inc

Seapeak LLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Seapeak LLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Seapeak LLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

ONEOK Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, ONEOK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Seapeak LLC and ONEOK

The main advantage of trading using opposite Seapeak LLC and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seapeak LLC position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.

The idea behind Seapeak LLC and ONEOK Inc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.