Correlation Between Teekay Shipping and HOSTESS BRANDS

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Can any of the company-specific risk be diversified away by investing in both Teekay Shipping and HOSTESS BRANDS 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 Shipping and HOSTESS BRANDS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teekay Shipping Corp and HOSTESS BRANDS A, you can compare the effects of market volatilities on Teekay Shipping and HOSTESS BRANDS 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 Shipping with a short position of HOSTESS BRANDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teekay Shipping and HOSTESS BRANDS.

Diversification Opportunities for Teekay Shipping and HOSTESS BRANDS

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Teekay and HOSTESS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Teekay Shipping Corp and HOSTESS BRANDS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOSTESS BRANDS A and Teekay Shipping 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 Shipping Corp are associated (or correlated) with HOSTESS BRANDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOSTESS BRANDS A has no effect on the direction of Teekay Shipping i.e., Teekay Shipping and HOSTESS BRANDS go up and down completely randomly.

Pair Corralation between Teekay Shipping and HOSTESS BRANDS

If you would invest  391.00  in Teekay Shipping Corp on August 30, 2022 and sell it today you would earn a total of  38.00  from holding Teekay Shipping Corp or generate 9.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Teekay Shipping Corp  vs.  HOSTESS BRANDS A DL 0001

 Performance (%) 
       Timeline  
Teekay Shipping Corp 
Teekay Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Teekay Shipping Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward-looking signals, Teekay Shipping demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Teekay Price Channel

HOSTESS BRANDS A 
HOSTESS Performance
0 of 100
Over the last 90 days HOSTESS BRANDS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HOSTESS BRANDS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Teekay Shipping and HOSTESS BRANDS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Teekay Shipping and HOSTESS BRANDS

The main advantage of trading using opposite Teekay Shipping and HOSTESS BRANDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay Shipping position performs unexpectedly, HOSTESS BRANDS 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 HOSTESS BRANDS will offset losses from the drop in HOSTESS BRANDS's long position.
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The idea behind Teekay Shipping Corp and HOSTESS BRANDS A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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