Correlation Between Pyxis Tankers and Fidelity Mid

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

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

Diversification Opportunities for Pyxis Tankers and Fidelity Mid

0.45

Correlation Coefficient

Pyxis Tankers  Fidelity Mid

Very weak diversification

The 3 months correlation between Pyxis and Fidelity is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pyxis Tankers and Fidelity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Mid Cap 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 Fidelity Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Mid Cap has no effect on the direction of Pyxis Tankers i.e., Pyxis Tankers and Fidelity Mid go up and down completely randomly.

Pair Corralation between Pyxis Tankers and Fidelity Mid

Considering the 90-day investment horizon Pyxis Tankers is expected to generate 2.3 times more return on investment than Fidelity Mid. However, Pyxis Tankers is 2.3 times more volatile than Fidelity Mid Cap. It trades about 0.11 of its potential returns per unit of risk. Fidelity Mid Cap is currently generating about 0.04 per unit of risk. If you would invest  427.00  in Pyxis Tankers on January 24, 2024 and sell it today you would earn a total of  35.00  from holding Pyxis Tankers or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Pyxis Tankers  vs.  Fidelity Mid Cap

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 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.

Fidelity Mid Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Mid may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Pyxis Tankers and Fidelity Mid

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

The idea behind Pyxis Tankers and Fidelity Mid Cap 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 Transaction History module to view history of all your transactions and understand their impact on performance.