Correlation Between Kirby and Pyxis Tankers

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

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

Diversification Opportunities for Kirby and Pyxis Tankers

0.32

Correlation Coefficient

Kirby  Pyxis Tankers

Weak diversification

The 3 months correlation between Kirby and Pyxis is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Kirby 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 Kirby 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 Kirby i.e., Kirby and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Kirby and Pyxis Tankers

Considering the 90-day investment horizon Kirby is expected to under-perform the Pyxis Tankers. But the stock apears to be less risky and, when comparing its historical volatility, Kirby is 1.15 times less risky than Pyxis Tankers. The stock trades about -0.64 of its potential returns per unit of risk. The Pyxis Tankers is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  398.00  in Pyxis Tankers on September 25, 2024 and sell it today you would lose (21.00) from holding Pyxis Tankers or give up 5.28% of portfolio value over 90 days.

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

Kirby  vs.  Pyxis Tankers

Kirby

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kirby has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kirby and Pyxis Tankers

The main advantage of trading using opposite Kirby and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby 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 Kirby 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.