Correlation Between Navigator Holdings and Pyxis Tankers

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

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

Diversification Opportunities for Navigator Holdings and Pyxis Tankers

0.75

Correlation Coefficient

Navigator Holdings  Pyxis Tankers

Poor diversification

The 3 months correlation between Navigator and Pyxis is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Holdings and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Navigator Holdings 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 Navigator Holdings 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 Navigator Holdings i.e., Navigator Holdings and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Navigator Holdings and Pyxis Tankers

Given the investment horizon of 90 days Navigator Holdings is expected to generate 0.71 times more return on investment than Pyxis Tankers. However, Navigator Holdings is 1.4 times less risky than Pyxis Tankers. It trades about 0.04 of its potential returns per unit of risk. Pyxis Tankers is currently generating about 0.02 per unit of risk. If you would invest  1,273  in Navigator Holdings on October 3, 2024 and sell it today you would earn a total of  262.00  from holding Navigator Holdings or generate 20.58% return on investment over 90 days.

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

Navigator Holdings  vs.  Pyxis Tankers

Navigator Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navigator Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains 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. 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 Navigator Holdings and Pyxis Tankers

The main advantage of trading using opposite Navigator Holdings and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Holdings 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 Navigator Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.