Correlation Between KNOT Offshore and Pyxis Tankers
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and Pyxis Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Pyxis Tankers, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Pyxis Tankers.
Diversification Opportunities for KNOT Offshore and Pyxis Tankers
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KNOT and Pyxis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and Pyxis Tankers go up and down completely randomly.
Pair Corralation between KNOT Offshore and Pyxis Tankers
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.88 times more return on investment than Pyxis Tankers. However, KNOT Offshore Partners is 1.13 times less risky than Pyxis Tankers. It trades about -0.05 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.32 per unit of risk. If you would invest 615.00 in KNOT Offshore Partners on August 28, 2024 and sell it today you would lose (13.00) from holding KNOT Offshore Partners or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Pyxis Tankers
Performance |
| Timeline |
| KNOT Offshore Partners |
| Pyxis Tankers |
KNOT Offshore and Pyxis Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Pyxis Tankers
The main advantage of trading using opposite KNOT Offshore and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |