Correlation Between Martin Midstream and Teekay Tankers
Can any of the company-specific risk be diversified away by investing in both Martin Midstream 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 Martin Midstream and Teekay Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martin Midstream Partners and Teekay Tankers, you can compare the effects of market volatilities on Martin Midstream 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 Martin Midstream with a short position of Teekay Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Midstream and Teekay Tankers.
Diversification Opportunities for Martin Midstream and Teekay Tankers
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Martin and Teekay is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Martin Midstream Partners and Teekay Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay Tankers and Martin Midstream 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 Martin Midstream Partners 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 Martin Midstream i.e., Martin Midstream and Teekay Tankers go up and down completely randomly.
Pair Corralation between Martin Midstream and Teekay Tankers
Given the investment horizon of 90 days Martin Midstream Partners is expected to generate 1.2 times more return on investment than Teekay Tankers. However, Martin Midstream is 1.2 times more volatile than Teekay Tankers. It trades about 0.04 of its potential returns per unit of risk. Teekay Tankers is currently generating about 0.01 per unit of risk. If you would invest 262.00 in Martin Midstream Partners on December 1, 2024 and sell it today you would earn a total of 113.00 from holding Martin Midstream Partners or generate 43.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Martin Midstream Partners vs. Teekay Tankers
Performance |
Timeline |
Martin Midstream Partners |
Teekay Tankers |
Martin Midstream and Teekay Tankers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Martin Midstream and Teekay Tankers
The main advantage of trading using opposite Martin Midstream and Teekay Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Midstream 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.Martin Midstream vs. Western Midstream Partners | Martin Midstream vs. Kinetik Holdings | Martin Midstream vs. NGL Energy Partners | Martin Midstream vs. Genesis Energy LP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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