Correlation Between Teekay and United Maritime
Can any of the company-specific risk be diversified away by investing in both Teekay and United Maritime 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 Teekay and United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay and United Maritime, you can compare the effects of market volatilities on Teekay and United Maritime 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 Teekay with a short position of United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay and United Maritime.
Diversification Opportunities for Teekay and United Maritime
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Teekay and United is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Teekay and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime and Teekay 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 Teekay are associated (or correlated) with United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of Teekay i.e., Teekay and United Maritime go up and down completely randomly.
Pair Corralation between Teekay and United Maritime
Allowing for the 90-day total investment horizon Teekay is expected to generate 1.14 times more return on investment than United Maritime. However, Teekay is 1.14 times more volatile than United Maritime. It trades about 0.02 of its potential returns per unit of risk. United Maritime is currently generating about -0.27 per unit of risk. If you would invest 675.00 in Teekay on September 25, 2024 and sell it today you would earn a total of 4.00 from holding Teekay or generate 0.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Teekay vs. United Maritime
Performance |
Timeline |
Teekay |
United Maritime |
Teekay and United Maritime Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teekay and United Maritime
The main advantage of trading using opposite Teekay and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay position performs unexpectedly, United Maritime 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 United Maritime will offset losses from the drop in United Maritime's long position.Teekay vs. United Maritime | Teekay vs. Globus Maritime | Teekay vs. Castor Maritime | Teekay vs. Safe Bulkers |
United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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