Correlation Between ONEOK and TOP Ships
Can any of the company-specific risk be diversified away by investing in both ONEOK and TOP Ships 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 ONEOK and TOP Ships into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and TOP Ships, you can compare the effects of market volatilities on ONEOK and TOP Ships 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 ONEOK with a short position of TOP Ships. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and TOP Ships.
Diversification Opportunities for ONEOK and TOP Ships
Very good diversification
The 3 months correlation between ONEOK and TOP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and TOP Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOP Ships and ONEOK 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 ONEOK Inc are associated (or correlated) with TOP Ships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOP Ships has no effect on the direction of ONEOK i.e., ONEOK and TOP Ships go up and down completely randomly.
Pair Corralation between ONEOK and TOP Ships
Considering the 90-day investment horizon ONEOK Inc is expected to generate 0.58 times more return on investment than TOP Ships. However, ONEOK Inc is 1.73 times less risky than TOP Ships. It trades about 0.06 of its potential returns per unit of risk. TOP Ships is currently generating about 0.0 per unit of risk. If you would invest 7,920 in ONEOK Inc on February 27, 2024 and sell it today you would earn a total of 165.00 from holding ONEOK Inc or generate 2.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ONEOK Inc vs. TOP Ships
Performance |
Timeline |
ONEOK Inc |
TOP Ships |
ONEOK and TOP Ships Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ONEOK and TOP Ships
The main advantage of trading using opposite ONEOK and TOP Ships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, TOP Ships 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 TOP Ships will offset losses from the drop in TOP Ships' long position.ONEOK vs. Genesis Energy LP | ONEOK vs. Brooge Holdings | ONEOK vs. Hess Midstream Partners | ONEOK vs. NGL Energy Partners |
TOP Ships vs. Danaos | TOP Ships vs. Global Ship Lease | TOP Ships vs. Euroseas | TOP Ships vs. Navios Maritime Partners |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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