Correlation Between Western Bulk and Pyxis Tankers
Can any of the company-specific risk be diversified away by investing in both Western Bulk 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 Western Bulk and Pyxis Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Bulk Chartering and Pyxis Tankers, you can compare the effects of market volatilities on Western Bulk 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 Western Bulk with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Bulk and Pyxis Tankers.
Diversification Opportunities for Western Bulk and Pyxis Tankers
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Pyxis is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Western Bulk 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 Western Bulk Chartering 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 Western Bulk i.e., Western Bulk and Pyxis Tankers go up and down completely randomly.
Pair Corralation between Western Bulk and Pyxis Tankers
Assuming the 90 days horizon Western Bulk Chartering is expected to under-perform the Pyxis Tankers. In addition to that, Western Bulk is 7.98 times more volatile than Pyxis Tankers. It trades about -0.11 of its total potential returns per unit of risk. Pyxis Tankers is currently generating about 0.1 per unit of volatility. If you would invest 2,411 in Pyxis Tankers on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Pyxis Tankers or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.75% |
| Values | Daily Returns |
Western Bulk Chartering vs. Pyxis Tankers
Performance |
| Timeline |
| Western Bulk Chartering |
| Pyxis Tankers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Western Bulk and Pyxis Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Bulk and Pyxis Tankers
The main advantage of trading using opposite Western Bulk and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk 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.| Western Bulk vs. SITC International Holdings | Western Bulk vs. Pacific Basin Shipping | Western Bulk vs. SITC International Holdings | Western Bulk vs. Mitsui OSK Lines |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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