Correlation Between Fresh Del and Pyxis Tankers

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

By analyzing existing cross correlation between Fresh Del Monte and Pyxis Tankers, you can compare the effects of market volatilities on Fresh Del 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 Fresh Del with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and Pyxis Tankers.

Diversification Opportunities for Fresh Del and Pyxis Tankers

0.75

Correlation Coefficient

Fresh Del  Pyxis Tankers

Poor diversification

The 3 months correlation between Fresh and Pyxis is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Fresh Del 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 Fresh Del Monte 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 Fresh Del i.e., Fresh Del and Pyxis Tankers go up and down completely randomly.

Pair Corralation between Fresh Del and Pyxis Tankers

Considering the 90-day investment horizon Fresh Del is expected to generate 1.08 times less return on investment than Pyxis Tankers. But when comparing it to its historical volatility, Fresh Del Monte is 1.59 times less risky than Pyxis Tankers. It trades about 0.03 of its potential returns per unit of risk. Pyxis Tankers is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  455.00  in Pyxis Tankers on January 20, 2024 and sell it today you would earn a total of  7.00  from holding Pyxis Tankers or generate 1.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fresh Del Monte  vs.  Pyxis Tankers

Fresh Del Monte

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Del Monte are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Fresh Del is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pyxis Tankers

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pyxis Tankers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pyxis Tankers is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fresh Del and Pyxis Tankers

The main advantage of trading using opposite Fresh Del and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del 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 Fresh Del Monte 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.