Correlation Between AP Mller and Pyxis Tankers
Can any of the company-specific risk be diversified away by investing in both AP Mller 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 AP Mller and Pyxis Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Pyxis Tankers, you can compare the effects of market volatilities on AP Mller 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 AP Mller with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Pyxis Tankers.
Diversification Opportunities for AP Mller and Pyxis Tankers
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMKBF and Pyxis is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and AP Mller 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 AP Mller 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 AP Mller i.e., AP Mller and Pyxis Tankers go up and down completely randomly.
Pair Corralation between AP Mller and Pyxis Tankers
Assuming the 90 days horizon AP Mller is expected to generate 1.4 times more return on investment than Pyxis Tankers. However, AP Mller is 1.4 times more volatile than Pyxis Tankers. It trades about -0.03 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.12 per unit of risk. If you would invest 189,896 in AP Mller on August 31, 2024 and sell it today you would lose (26,288) from holding AP Mller or give up 13.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
AP Mller vs. Pyxis Tankers
Performance |
| Timeline |
| AP Mller |
| Pyxis Tankers |
AP Mller and Pyxis Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and Pyxis Tankers
The main advantage of trading using opposite AP Mller and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller 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.| AP Mller vs. Mitsui OSK Lines | AP Mller vs. Hapag Lloyd Aktiengesellschaft | AP Mller vs. Orient Overseas Limited | AP Mller vs. Hapag Lloyd Aktiengesellschaft |
| Pyxis Tankers vs. EuroDry | Pyxis Tankers vs. Costamare | Pyxis Tankers vs. Global Ship Lease | Pyxis Tankers vs. Danaos |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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