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 Maersk AS 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

0.64

Correlation Coefficient

AP Moeller  Pyxis Tankers

Poor diversification

The 3 months correlation between AMKBY and Pyxis is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS 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 Maersk AS 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 Maersk AS is expected to generate 15.07 times more return on investment than Pyxis Tankers. However, AP Moeller is 15.07 times more volatile than Pyxis Tankers. It trades about 0.01 of its potential returns per unit of risk. Pyxis Tankers is currently generating about 0.05 per unit of risk. If you would invest  835.00  in AP Moeller Maersk AS on September 29, 2024 and sell it today you would lose (4.00) from holding AP Moeller Maersk AS or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.33%
Values	Daily Returns

AP Moeller Maersk AS  vs.  Pyxis Tankers

AP Moeller Maersk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Moeller Maersk AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, AP Moeller is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

Insignificant

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.

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 Maersk AS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.