Correlation Between United Maritime and Teekay
Can any of the company-specific risk be diversified away by investing in both United Maritime 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 United Maritime and Teekay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Maritime and Teekay, you can compare the effects of market volatilities on United Maritime 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 United Maritime with a short position of Teekay. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Teekay.
Diversification Opportunities for United Maritime and Teekay
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Teekay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay and United Maritime 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 United Maritime 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 United Maritime i.e., United Maritime and Teekay go up and down completely randomly.
Pair Corralation between United Maritime and Teekay
Given the investment horizon of 90 days United Maritime is expected to under-perform the Teekay. But the stock apears to be less risky and, when comparing its historical volatility, United Maritime is 1.14 times less risky than Teekay. The stock trades about -0.27 of its potential returns per unit of risk. The Teekay is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Teekay on September 26, 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 |
United Maritime vs. Teekay
Performance |
Timeline |
United Maritime |
Teekay |
United Maritime and Teekay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Maritime and Teekay
The main advantage of trading using opposite United Maritime and Teekay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Maritime 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.United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
Teekay vs. United Maritime | Teekay vs. Globus Maritime | Teekay vs. Castor Maritime | Teekay 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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