Correlation Between Pyxis Tankers and Euroseas

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

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

Diversification Opportunities for Pyxis Tankers and Euroseas

0.49

Correlation Coefficient

Pyxis Tankers  Euroseas

Very weak diversification

The 3 months correlation between Pyxis and Euroseas is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas and Pyxis Tankers 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 Pyxis Tankers are associated (or correlated) with Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and Euroseas go up and down completely randomly.

Pair Corralation between Pyxis Tankers and Euroseas

Assuming the 90 days horizon Pyxis Tankers is expected to under-perform the Euroseas. In addition to that, Pyxis Tankers is 5.42 times more volatile than Euroseas. It trades about -0.09 of its total potential returns per unit of risk. Euroseas is currently generating about -0.03 per unit of volatility. If you would invest  3,460  in Euroseas on December 26, 2024 and sell it today you would lose (334.00) from holding Euroseas or give up 9.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.57%
Values	Daily Returns

Pyxis Tankers  vs.  Euroseas

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.

Euroseas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Euroseas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Euroseas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pyxis Tankers and Euroseas

The main advantage of trading using opposite Pyxis Tankers and Euroseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyxis Tankers position performs unexpectedly, Euroseas 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 Euroseas will offset losses from the drop in Euroseas' long position.

The idea behind Pyxis Tankers and Euroseas 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.