Correlation Between Mitsui OSK and Pyxis Tankers

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

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

Diversification Opportunities for Mitsui OSK and Pyxis Tankers

-0.48

Correlation Coefficient

Mitsui OSK  Pyxis Tankers

Very good diversification

The 3 months correlation between Mitsui and Pyxis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui OSK Lines and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Mitsui OSK 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 Mitsui OSK Lines 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 Mitsui OSK i.e., Mitsui OSK and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Mitsui OSK and Pyxis Tankers

Assuming the 90 days horizon Mitsui OSK Lines is expected to generate 0.81 times more return on investment than Pyxis Tankers. However, Mitsui OSK Lines is 1.23 times less risky than Pyxis Tankers. It trades about 0.0 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.13 per unit of risk. If you would invest  1,628  in Mitsui OSK Lines on October 26, 2024 and sell it today you would lose (17.00) from holding Mitsui OSK Lines or give up 1.04% of portfolio value over 90 days.

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

Mitsui OSK Lines  vs.  Pyxis Tankers

Mitsui OSK Lines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsui OSK Lines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mitsui OSK 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

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 Mitsui OSK and Pyxis Tankers

The main advantage of trading using opposite Mitsui OSK and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui OSK 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 Mitsui OSK Lines 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.