Correlation Between EURN Old and Teekay

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

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

Diversification Opportunities for EURN Old and Teekay

-0.07

Correlation Coefficient

EURN Old  Teekay

Good diversification

The 3 months correlation between EURN and Teekay is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding EURN Old and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and EURN Old 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 EURN Old are associated (or correlated) with Teekay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay has no effect on the direction of EURN Old i.e., EURN Old and Teekay go up and down completely randomly.

Pair Corralation between EURN Old and Teekay

If you would invest  661.00  in Teekay on October 22, 2024 and sell it today you would earn a total of  81.00  from holding Teekay or generate 12.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

EURN Old  vs.  Teekay

EURN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EURN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EURN Old is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Teekay

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teekay are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Teekay is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with EURN Old and Teekay

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

The idea behind EURN Old and Teekay 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.