Correlation Between SMLP Old and Teekay

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

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

Diversification Opportunities for SMLP Old and Teekay

0.0

Correlation Coefficient

SMLP Old  Teekay

Pay attention - limited upside

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

Pair Corralation between SMLP Old and Teekay

If you would invest  638.00  in Teekay on December 1, 2024 and sell it today you would earn a total of  16.00  from holding Teekay or generate 2.51% return on investment over 90 days.

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

SMLP Old  vs.  Teekay

SMLP Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMLP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, SMLP Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Teekay

Risk-Adjusted Performance

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 SMLP Old and Teekay

The main advantage of trading using opposite SMLP Old and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMLP 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 SMLP 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.