Correlation Between Pyxis Tankers and El Paso
Can any of the company-specific risk be diversified away by investing in both Pyxis Tankers and El Paso 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 El Paso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyxis Tankers and El Paso Energy, you can compare the effects of market volatilities on Pyxis Tankers and El Paso 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 El Paso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyxis Tankers and El Paso.
Diversification Opportunities for Pyxis Tankers and El Paso
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pyxis and EP-PC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and El Paso Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Paso Energy 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 El Paso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Paso Energy has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and El Paso go up and down completely randomly.
Pair Corralation between Pyxis Tankers and El Paso
Assuming the 90 days horizon Pyxis Tankers is expected to under-perform the El Paso. In addition to that, Pyxis Tankers is 26.89 times more volatile than El Paso Energy. It trades about -0.07 of its total potential returns per unit of risk. El Paso Energy is currently generating about 0.07 per unit of volatility. If you would invest 4,750 in El Paso Energy on August 31, 2024 and sell it today you would earn a total of 86.00 from holding El Paso Energy or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Pyxis Tankers vs. El Paso Energy
Performance |
| Timeline |
| Pyxis Tankers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| El Paso Energy |
Pyxis Tankers and El Paso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyxis Tankers and El Paso
The main advantage of trading using opposite Pyxis Tankers and El Paso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyxis Tankers position performs unexpectedly, El Paso 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 El Paso will offset losses from the drop in El Paso's long position.The idea behind Pyxis Tankers and El Paso Energy 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.| El Paso vs. Dynagas LNG Partners | El Paso vs. GasLog Partners LP | El Paso vs. HUMANA INC | El Paso vs. Aquagold International |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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