Correlation Between Nordic American and Pyxis Tankers

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

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

Diversification Opportunities for Nordic American and Pyxis Tankers

0.01

Correlation Coefficient

Nordic American  Pyxis Tankers

Significant diversification

The 3 months correlation between Nordic and Pyxis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nordic American Tankers and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Nordic American 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 Nordic American Tankers 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 Nordic American i.e., Nordic American and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Nordic American and Pyxis Tankers

Considering the 90-day investment horizon Nordic American Tankers is expected to generate 1.97 times more return on investment than Pyxis Tankers. However, Nordic American is 1.97 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  234.00  in Nordic American Tankers on October 15, 2024 and sell it today you would earn a total of  55.00  from holding Nordic American Tankers or generate 23.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.7%
Values	Daily Returns

Nordic American Tankers  vs.  Pyxis Tankers

Nordic American Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordic American Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting 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.

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. 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 Nordic American and Pyxis Tankers

The main advantage of trading using opposite Nordic American and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic American 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 Nordic American Tankers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.