Correlation Between AP Moeller and Pyxis Tankers

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

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

Diversification Opportunities for AP Moeller and Pyxis Tankers

-0.55

Correlation Coefficient

AP Moeller  Pyxis Tankers

Excellent diversification

The 3 months correlation between AMKAF and Pyxis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and AP Moeller 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 AP Moeller are associated (or correlated) with Pyxis Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxis Tankers has no effect on the direction of AP Moeller i.e., AP Moeller and Pyxis Tankers go up and down completely randomly.

Pair Corralation between AP Moeller and Pyxis Tankers

Assuming the 90 days horizon AP Moeller is expected to generate 1.84 times more return on investment than Pyxis Tankers. However, AP Moeller is 1.84 times more volatile than Pyxis Tankers. It trades about 0.0 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.14 per unit of risk. If you would invest  168,950  in AP Moeller on September 24, 2024 and sell it today you would lose (12,035) from holding AP Moeller or give up 7.12% of portfolio value over 90 days.

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

AP Moeller   vs.  Pyxis Tankers

AP Moeller

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AP Moeller is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AP Moeller and Pyxis Tankers

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

The idea behind AP Moeller and Pyxis 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.