Correlation Between Tsakos Energy and Martin Midstream
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Martin Midstream 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 Tsakos Energy and Martin Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsakos Energy Navigation and Martin Midstream Partners, you can compare the effects of market volatilities on Tsakos Energy and Martin Midstream 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 Tsakos Energy with a short position of Martin Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Martin Midstream.
Diversification Opportunities for Tsakos Energy and Martin Midstream
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tsakos and Martin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Martin Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Midstream Partners and Tsakos Energy 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 Tsakos Energy Navigation are associated (or correlated) with Martin Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Midstream Partners has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Martin Midstream go up and down completely randomly.
Pair Corralation between Tsakos Energy and Martin Midstream
Assuming the 90 days trading horizon Tsakos Energy is expected to generate 9.65 times less return on investment than Martin Midstream. But when comparing it to its historical volatility, Tsakos Energy Navigation is 5.41 times less risky than Martin Midstream. It trades about 0.18 of its potential returns per unit of risk. Martin Midstream Partners is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 294.00 in Martin Midstream Partners on March 13, 2024 and sell it today you would earn a total of 35.00 from holding Martin Midstream Partners or generate 11.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tsakos Energy Navigation vs. Martin Midstream Partners
Performance |
Timeline |
Tsakos Energy Navigation |
Martin Midstream Partners |
Tsakos Energy and Martin Midstream Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tsakos Energy and Martin Midstream
The main advantage of trading using opposite Tsakos Energy and Martin Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Martin Midstream 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 Martin Midstream will offset losses from the drop in Martin Midstream's long position.Tsakos Energy vs. Tsakos Energy Navigation | Tsakos Energy vs. GasLog Partners LP | Tsakos Energy vs. Dynagas LNG Partners | Tsakos Energy vs. GasLog Partners LP |
Martin Midstream vs. DT Midstream | Martin Midstream vs. MPLX LP | Martin Midstream vs. Hess Midstream Partners | Martin Midstream vs. Plains All American |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Bonds Directory Find actively traded corporate debentures issued by US companies |