Correlation Between CPLP Old and Pyxis Tankers

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

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

Diversification Opportunities for CPLP Old and Pyxis Tankers

0.28

Correlation Coefficient

CPLP Old  Pyxis Tankers

Modest diversification

The 3 months correlation between CPLP and Pyxis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CPLP Old and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and CPLP Old 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 CPLP Old 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 CPLP Old i.e., CPLP Old and Pyxis Tankers go up and down completely randomly.

Pair Corralation between CPLP Old and Pyxis Tankers

Given the investment horizon of 90 days CPLP Old is expected to under-perform the Pyxis Tankers. In addition to that, CPLP Old is 2.1 times more volatile than Pyxis Tankers. It trades about -0.03 of its total potential returns per unit of risk. Pyxis Tankers is currently generating about -0.01 per unit of volatility. If you would invest  515.00  in Pyxis Tankers on October 11, 2024 and sell it today you would lose (125.00) from holding Pyxis Tankers or give up 24.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.25%
Values	Daily Returns

CPLP Old  vs.  Pyxis Tankers

CPLP Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CPLP Old and Pyxis Tankers

The main advantage of trading using opposite CPLP Old and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPLP Old 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 CPLP Old 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.