Correlation Between Taylor Maritime and Tesco PLC

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

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

Diversification Opportunities for Taylor Maritime and Tesco PLC

0.87

Correlation Coefficient

Taylor Maritime  Tesco PLC

Very poor diversification

The 3 months correlation between Taylor and Tesco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Maritime Investments and Tesco PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesco PLC and Taylor Maritime 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 Taylor Maritime Investments are associated (or correlated) with Tesco PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesco PLC has no effect on the direction of Taylor Maritime i.e., Taylor Maritime and Tesco PLC go up and down completely randomly.

Pair Corralation between Taylor Maritime and Tesco PLC

Assuming the 90 days trading horizon Taylor Maritime Investments is expected to generate 1.95 times more return on investment than Tesco PLC. However, Taylor Maritime is 1.95 times more volatile than Tesco PLC. It trades about 0.19 of its potential returns per unit of risk. Tesco PLC is currently generating about 0.31 per unit of risk. If you would invest  5,847  in Taylor Maritime Investments on April 2, 2025 and sell it today you would earn a total of  853.00  from holding Taylor Maritime Investments or generate 14.59% return on investment over 90 days.

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

Taylor Maritime Investments  vs.  Tesco PLC

Taylor Maritime Inve

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taylor Maritime Investments are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Taylor Maritime unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tesco PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tesco PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tesco PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taylor Maritime and Tesco PLC

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

The idea behind Taylor Maritime Investments and Tesco PLC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.