Correlation Between Hapag Lloyd and Pyxis Tankers

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

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

Diversification Opportunities for Hapag Lloyd and Pyxis Tankers

-0.31

Correlation Coefficient

Hapag Lloyd  Pyxis Tankers

Very good diversification

The 3 months correlation between Hapag and Pyxis is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Hapag Lloyd 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 Hapag Lloyd Aktiengesellschaft 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 Hapag Lloyd i.e., Hapag Lloyd and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Hapag Lloyd and Pyxis Tankers

Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to generate 4.63 times more return on investment than Pyxis Tankers. However, Hapag Lloyd is 4.63 times more volatile than Pyxis Tankers. It trades about 0.03 of its potential returns per unit of risk. Pyxis Tankers is currently generating about 0.04 per unit of risk. If you would invest  7,214  in Hapag Lloyd Aktiengesellschaft on September 24, 2024 and sell it today you would earn a total of  661.00  from holding Hapag Lloyd Aktiengesellschaft or generate 9.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.9%
Values	Daily Returns

Hapag Lloyd Aktiengesellschaft  vs.  Pyxis Tankers

Hapag Lloyd Aktienge

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hapag Lloyd Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

Modest

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 Hapag Lloyd and Pyxis Tankers

The main advantage of trading using opposite Hapag Lloyd and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag Lloyd 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 Hapag Lloyd Aktiengesellschaft 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.