Correlation Between United Maritime and Teekay Tankers
Can any of the company-specific risk be diversified away by investing in both United 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 United 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 United Maritime and Teekay Tankers, you can compare the effects of market volatilities on United 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 United Maritime with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Teekay Tankers.
Diversification Opportunities for United Maritime and Teekay Tankers
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Teekay is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers and United 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 United 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 United Maritime i.e., United Maritime and Teekay Tankers go up and down completely randomly.
Pair Corralation between United Maritime and Teekay Tankers
Given the investment horizon of 90 days United Maritime is expected to generate 1.04 times more return on investment than Teekay Tankers. However, United Maritime is 1.04 times more volatile than Teekay Tankers. It trades about -0.25 of its potential returns per unit of risk. Teekay Tankers is currently generating about -0.3 per unit of risk. If you would invest 260.00 in United Maritime on September 24, 2024 and sell it today you would lose (75.00) from holding United Maritime or give up 28.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
United Maritime vs. Teekay Tankers
Performance |
Timeline |
United Maritime |
Teekay Tankers |
United Maritime and Teekay Tankers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Maritime and Teekay Tankers
The main advantage of trading using opposite United Maritime and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United 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.United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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