Correlation Between EURN Old and Teekay Tankers

Can any of the company-specific risk be diversified away by investing in both EURN Old 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 EURN Old and Teekay Tankers 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 Tankers, you can compare the effects of market volatilities on EURN Old 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 EURN Old with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of EURN Old and Teekay Tankers.

Diversification Opportunities for EURN Old and Teekay Tankers

0.0

Correlation Coefficient

EURN Old  Teekay Tankers

Pay attention - limited upside

The 3 months correlation between EURN and Teekay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EURN Old and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers 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 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 EURN Old i.e., EURN Old and Teekay Tankers go up and down completely randomly.

Pair Corralation between EURN Old and Teekay Tankers

If you would invest  3,860  in Teekay Tankers on December 29, 2024 and sell it today you would lose (43.00) from holding Teekay Tankers or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EURN Old  vs.  Teekay Tankers

EURN Old

Risk-Adjusted Performance

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 Tankers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teekay Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Teekay Tankers is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with EURN Old and Teekay Tankers

The main advantage of trading using opposite EURN Old and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EURN Old 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.

The idea behind EURN Old and Teekay Tankers 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.