Correlation Between Oceanpal and Pyxis Tankers

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

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

Diversification Opportunities for Oceanpal and Pyxis Tankers

0.51

Correlation Coefficient

Oceanpal  Pyxis Tankers

Very weak diversification

The 3 months correlation between Oceanpal and Pyxis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Oceanpal 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 Oceanpal 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 Oceanpal i.e., Oceanpal and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Oceanpal and Pyxis Tankers

Allowing for the 90-day total investment horizon Oceanpal is expected to generate 0.15 times more return on investment than Pyxis Tankers. However, Oceanpal is 6.76 times less risky than Pyxis Tankers. It trades about -0.13 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.1 per unit of risk. If you would invest  114.00  in Oceanpal on December 28, 2024 and sell it today you would lose (27.00) from holding Oceanpal or give up 23.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.0%
Values	Daily Returns

Oceanpal  vs.  Pyxis Tankers

Oceanpal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pyxis Tankers

Risk-Adjusted Performance

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Oceanpal and Pyxis Tankers

The main advantage of trading using opposite Oceanpal and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal 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 Oceanpal 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.