Correlation Between ONEOK and Teekay
Can any of the company-specific risk be diversified away by investing in both ONEOK 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 ONEOK and Teekay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Teekay, you can compare the effects of market volatilities on ONEOK 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 ONEOK with a short position of Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Teekay.
Diversification Opportunities for ONEOK and Teekay
Good diversification
The 3 months correlation between ONEOK and Teekay is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and ONEOK 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 ONEOK Inc 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 ONEOK i.e., ONEOK and Teekay go up and down completely randomly.
Pair Corralation between ONEOK and Teekay
Considering the 90-day investment horizon ONEOK Inc is expected to under-perform the Teekay. But the stock apears to be less risky and, when comparing its historical volatility, ONEOK Inc is 1.44 times less risky than Teekay. The stock trades about -0.17 of its potential returns per unit of risk. The Teekay is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 642.00 in Teekay on November 28, 2024 and sell it today you would earn a total of 41.00 from holding Teekay or generate 6.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ONEOK Inc vs. Teekay
Performance |
Timeline |
ONEOK Inc |
Teekay |
ONEOK and Teekay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ONEOK and Teekay
The main advantage of trading using opposite ONEOK and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK 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.ONEOK vs. Enterprise Products Partners | ONEOK vs. MPLX LP | ONEOK vs. Energy Transfer LP | ONEOK vs. Plains All American |
Teekay vs. Teekay Tankers | Teekay vs. DHT Holdings | Teekay vs. Frontline | Teekay vs. International Seaways |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Stocks Directory Find actively traded stocks across global markets | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Transaction History View history of all your transactions and understand their impact on performance |