Correlation Between Diana Shipping and Pyxis Tankers

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Can any of the company-specific risk be diversified away by investing in both Diana Shipping 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 Diana Shipping and Pyxis Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Pyxis Tankers, you can compare the effects of market volatilities on Diana Shipping 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 Diana Shipping with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Pyxis Tankers.

Diversification Opportunities for Diana Shipping and Pyxis Tankers

DianaPyxisDiversified AwayDianaPyxisDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Diana and Pyxis is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Diana Shipping 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 Diana Shipping 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 Diana Shipping i.e., Diana Shipping and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Diana Shipping and Pyxis Tankers

Considering the 90-day investment horizon Diana Shipping is expected to generate 1.36 times more return on investment than Pyxis Tankers. However, Diana Shipping is 1.36 times more volatile than Pyxis Tankers. It trades about 0.06 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.11 per unit of risk. If you would invest  178.00  in Diana Shipping on November 25, 2024 and sell it today you would earn a total of  4.00  from holding Diana Shipping or generate 2.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diana Shipping  vs.  Pyxis Tankers

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-5
JavaScript chart by amCharts 3.21.15DSX PXS
       Timeline  
Diana Shipping 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Diana Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Diana Shipping is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.751.81.851.91.9522.052.1
Pyxis Tankers 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.43.63.844.24.4

Diana Shipping and Pyxis Tankers Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.37-3.28-2.18-1.08-0.01830.961.962.963.964.96 0.050.060.070.080.09
JavaScript chart by amCharts 3.21.15DSX PXS
       Returns  

Pair Trading with Diana Shipping and Pyxis Tankers

The main advantage of trading using opposite Diana Shipping and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping 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 Diana Shipping 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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