Correlation Between International Seaways and DHT Holdings

Can any of the company-specific risk be diversified away by investing in both International Seaways and DHT Holdings 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 International Seaways and DHT Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Seaways and DHT Holdings, you can compare the effects of market volatilities on International Seaways and DHT Holdings 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 International Seaways with a short position of DHT Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and DHT Holdings.

Diversification Opportunities for International Seaways and DHT Holdings

0.7

Correlation Coefficient

International Seaways  DHT Holdings

Poor diversification

The 3 months correlation between International and DHT is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and DHT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHT Holdings and International Seaways 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 International Seaways are associated (or correlated) with DHT Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHT Holdings has no effect on the direction of International Seaways i.e., International Seaways and DHT Holdings go up and down completely randomly.

Pair Corralation between International Seaways and DHT Holdings

Given the investment horizon of 90 days International Seaways is expected to generate 1.35 times more return on investment than DHT Holdings. However, International Seaways is 1.35 times more volatile than DHT Holdings. It trades about 0.15 of its potential returns per unit of risk. DHT Holdings is currently generating about 0.07 per unit of risk. If you would invest  3,340  in International Seaways on April 25, 2025 and sell it today you would earn a total of  715.00  from holding International Seaways or generate 21.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

International Seaways  vs.  DHT Holdings

International Seaways

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Seaways are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, International Seaways showed solid returns over the last few months and may actually be approaching a breakup point.

DHT Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DHT Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical indicators, DHT Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with International Seaways and DHT Holdings

The main advantage of trading using opposite International Seaways and DHT Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, DHT Holdings 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 DHT Holdings will offset losses from the drop in DHT Holdings' long position.

The idea behind International Seaways and DHT Holdings 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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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.