Correlation Between Kinder Morgan and Gateway Real

Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and Gateway Real 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 Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinder Morgan and Gateway Real Estate, you can compare the effects of market volatilities on Kinder Morgan and Gateway Real 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 Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Gateway Real.

Diversification Opportunities for Kinder Morgan and Gateway Real

0.0

Correlation Coefficient

Kinder Morgan  Gateway Real

Pay attention - limited upside

The 3 months correlation between Kinder and Gateway is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and Gateway Real go up and down completely randomly.

Pair Corralation between Kinder Morgan and Gateway Real

If you would invest  37.00  in Gateway Real Estate on December 27, 2024 and sell it today you would earn a total of  40.00  from holding Gateway Real Estate or generate 108.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Kinder Morgan  vs.  Gateway Real Estate

Kinder Morgan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinder Morgan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kinder Morgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gateway Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Real Estate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gateway Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinder Morgan and Gateway Real

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

The idea behind Kinder Morgan and Gateway Real Estate 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.