Correlation Between Pyxis Tankers and Safe Bulkers

Can any of the company-specific risk be diversified away by investing in both Pyxis Tankers and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pyxis Tankers and Safe Bulkers, you can compare the effects of market volatilities on Pyxis Tankers and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyxis Tankers and Safe Bulkers.

Diversification Opportunities for Pyxis Tankers and Safe Bulkers

-0.77

Correlation Coefficient

Pyxis Tankers  Safe Bulkers

Pay attention - limited upside

The 3 months correlation between Pyxis and Safe is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and Safe Bulkers go up and down completely randomly.

Pair Corralation between Pyxis Tankers and Safe Bulkers

Assuming the 90 days horizon Pyxis Tankers is expected to under-perform the Safe Bulkers. In addition to that, Pyxis Tankers is 5.03 times more volatile than Safe Bulkers. It trades about -0.11 of its total potential returns per unit of risk. Safe Bulkers is currently generating about 0.12 per unit of volatility. If you would invest  491.00  in Safe Bulkers on February 2, 2024 and sell it today you would earn a total of  21.00  from holding Safe Bulkers or generate 4.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.26%
Values	Daily Returns

Pyxis Tankers  vs.  Safe Bulkers

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Safe Bulkers

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Safe Bulkers sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pyxis Tankers and Safe Bulkers

The main advantage of trading using opposite Pyxis Tankers and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyxis Tankers position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.

The idea behind Pyxis Tankers and Safe Bulkers 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.