Correlation Between Teekay Tankers and Pyxis Tankers

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

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

Diversification Opportunities for Teekay Tankers and Pyxis Tankers

0.75

Correlation Coefficient

Teekay Tankers  Pyxis Tankers

Poor diversification

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

Pair Corralation between Teekay Tankers and Pyxis Tankers

Considering the 90-day investment horizon Teekay Tankers is expected to under-perform the Pyxis Tankers. But the stock apears to be less risky and, when comparing its historical volatility, Teekay Tankers is 34.96 times less risky than Pyxis Tankers. The stock trades about -0.05 of its potential returns per unit of risk. The Pyxis Tankers is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  132.00  in Pyxis Tankers on October 1, 2024 and sell it today you would lose (112.00) from holding Pyxis Tankers or give up 84.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.61%
Values	Daily Returns

Teekay Tankers  vs.  Pyxis Tankers

Teekay Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teekay Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators 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.

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 unfluctuating 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.

Pair Trading with Teekay Tankers and Pyxis Tankers

The main advantage of trading using opposite Teekay Tankers and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay Tankers 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 Teekay 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.