Correlation Between Pyxis Tankers and Teekay

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

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

Diversification Opportunities for Pyxis Tankers and Teekay

0.66

Correlation Coefficient

Pyxis Tankers  Teekay

Poor diversification

The 3 months correlation between Pyxis and Teekay is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and Teekay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teekay 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 Teekay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teekay has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and Teekay go up and down completely randomly.

Pair Corralation between Pyxis Tankers and Teekay

Assuming the 90 days horizon Pyxis Tankers is expected to generate 10.42 times more return on investment than Teekay. However, Pyxis Tankers is 10.42 times more volatile than Teekay. It trades about 0.07 of its potential returns per unit of risk. Teekay is currently generating about 0.04 per unit of risk. If you would invest  25.00  in Pyxis Tankers on September 27, 2024 and sell it today you would lose (3.00) from holding Pyxis Tankers or give up 12.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.27%
Values	Daily Returns

Pyxis Tankers  vs.  Teekay

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

Teekay

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teekay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pyxis Tankers and Teekay

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

The idea behind Pyxis Tankers and Teekay 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.