Correlation Between Pyxis Tankers and AP Moeller

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

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

Diversification Opportunities for Pyxis Tankers and AP Moeller

0.56

Correlation Coefficient

Pyxis Tankers  AP Moeller

Very weak diversification

The 3 months correlation between Pyxis and AMKAF is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and Pyxis 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 Pyxis Tankers are associated (or correlated) with AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and AP Moeller go up and down completely randomly.

Pair Corralation between Pyxis Tankers and AP Moeller

Assuming the 90 days horizon Pyxis Tankers is expected to generate 19.84 times less return on investment than AP Moeller. But when comparing it to its historical volatility, Pyxis Tankers is 21.23 times less risky than AP Moeller. It trades about 0.1 of its potential returns per unit of risk. AP Moeller is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  133,500  in AP Moeller on September 14, 2024 and sell it today you would earn a total of  23,500  from holding AP Moeller or generate 17.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	49.21%
Values	Daily Returns

Pyxis Tankers  vs.  AP Moeller

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pyxis Tankers is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

AP Moeller

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Moeller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pyxis Tankers and AP Moeller

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

The idea behind Pyxis Tankers and AP Moeller 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.