Correlation Between Aquagold International and Pyxis Tankers

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

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

Diversification Opportunities for Aquagold International and Pyxis Tankers

0.59

Correlation Coefficient

Aquagold International  Pyxis Tankers

Very weak diversification

The 3 months correlation between Aquagold and Pyxis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Aquagold International and Pyxis Tankers

Given the investment horizon of 90 days Aquagold International is expected to generate 0.31 times more return on investment than Pyxis Tankers. However, Aquagold International is 3.22 times less risky than Pyxis Tankers. It trades about -0.12 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.1 per unit of risk. If you would invest  0.04  in Aquagold International on December 29, 2024 and sell it today you would lose (0.02) from holding Aquagold International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	62.5%
Values	Daily Returns

Aquagold International  vs.  Pyxis Tankers

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pyxis Tankers

Risk-Adjusted Performance

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Aquagold International and Pyxis Tankers

The main advantage of trading using opposite Aquagold International and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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 Aquagold International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.