Correlation Between Kinder Morgan and Pyxis Tankers
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan 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 Kinder Morgan and Pyxis Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and Pyxis Tankers, you can compare the effects of market volatilities on Kinder Morgan 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 Kinder Morgan with a short position of Pyxis Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Pyxis Tankers.
Diversification Opportunities for Kinder Morgan and Pyxis Tankers
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinder and Pyxis is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers and Kinder Morgan 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 Kinder Morgan 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 Kinder Morgan i.e., Kinder Morgan and Pyxis Tankers go up and down completely randomly.
Pair Corralation between Kinder Morgan and Pyxis Tankers
Considering the 90-day investment horizon Kinder Morgan is expected to generate 0.25 times more return on investment than Pyxis Tankers. However, Kinder Morgan is 3.95 times less risky than Pyxis Tankers. It trades about 0.37 of its potential returns per unit of risk. Pyxis Tankers is currently generating about -0.16 per unit of risk. If you would invest 2,434 in Kinder Morgan on August 30, 2024 and sell it today you would earn a total of 373.00 from holding Kinder Morgan or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 43.48% |
| Values | Daily Returns |
Kinder Morgan vs. Pyxis Tankers
Performance |
| Timeline |
| Kinder Morgan |
| Pyxis Tankers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinder Morgan and Pyxis Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and Pyxis Tankers
The main advantage of trading using opposite Kinder Morgan and Pyxis Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan 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.| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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