Correlation Between Teekay Tankers and Scorpio Tankers

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

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

Diversification Opportunities for Teekay Tankers and Scorpio Tankers

0.3

Correlation Coefficient

Teekay Tankers  Scorpio Tankers

Weak diversification

The 3 months correlation between Teekay and Scorpio is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Teekay Tankers and Scorpio Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scorpio Tankers and Teekay Tankers 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 Tankers are associated (or correlated) with Scorpio Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scorpio Tankers has no effect on the direction of Teekay Tankers i.e., Teekay Tankers and Scorpio Tankers go up and down completely randomly.

Pair Corralation between Teekay Tankers and Scorpio Tankers

Considering the 90-day investment horizon Teekay Tankers is expected to generate 11.8 times less return on investment than Scorpio Tankers. But when comparing it to its historical volatility, Teekay Tankers is 1.09 times less risky than Scorpio Tankers. It trades about 0.01 of its potential returns per unit of risk. Scorpio Tankers is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4,027  in Scorpio Tankers on May 6, 2025 and sell it today you would earn a total of  755.00  from holding Scorpio Tankers or generate 18.75% return on investment over 90 days.

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

Teekay Tankers  vs.  Scorpio Tankers

Teekay Tankers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teekay Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Teekay Tankers is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Scorpio Tankers

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scorpio Tankers are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Scorpio Tankers reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teekay Tankers and Scorpio Tankers

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

The idea behind Teekay Tankers and Scorpio Tankers 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.