Correlation Between Tsakos Energy and Canadian National
Can any of the company-specific risk be diversified away by investing in both Tsakos Energy and Canadian National 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 Canadian National 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 Canadian National Railway, you can compare the effects of market volatilities on Tsakos Energy and Canadian National 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 Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsakos Energy and Canadian National.
Diversification Opportunities for Tsakos Energy and Canadian National
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tsakos and Canadian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tsakos Energy Navigation and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway 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 Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of Tsakos Energy i.e., Tsakos Energy and Canadian National go up and down completely randomly.
Pair Corralation between Tsakos Energy and Canadian National
Considering the 90-day investment horizon Tsakos Energy Navigation is expected to generate 1.33 times more return on investment than Canadian National. However, Tsakos Energy is 1.33 times more volatile than Canadian National Railway. It trades about -0.08 of its potential returns per unit of risk. Canadian National Railway is currently generating about -0.2 per unit of risk. If you would invest 2,561 in Tsakos Energy Navigation on January 26, 2024 and sell it today you would lose (82.00) from holding Tsakos Energy Navigation or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tsakos Energy Navigation vs. Canadian National Railway
Performance |
| Timeline |
| Tsakos Energy Navigation |
| Canadian National Railway |
Tsakos Energy and Canadian National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsakos Energy and Canadian National
The main advantage of trading using opposite Tsakos Energy and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsakos Energy position performs unexpectedly, Canadian National 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 Canadian National will offset losses from the drop in Canadian National's long position.| Tsakos Energy vs. ONEOK Inc | Tsakos Energy vs. Enterprise Products Partners | Tsakos Energy vs. Energy Transfer LP | Tsakos Energy vs. Kinder Morgan |
| Canadian National vs. Westinghouse Air Brake | Canadian National vs. Trinity Industries | Canadian National vs. Greenbrier Companies | Canadian National vs. LB Foster |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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