Correlation Between Fukuoka Financial and Kinder Morgan

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

By analyzing existing cross correlation between Fukuoka Financial Group and Kinder Morgan, you can compare the effects of market volatilities on Fukuoka Financial and Kinder Morgan 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 Fukuoka Financial with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuoka Financial and Kinder Morgan.

Diversification Opportunities for Fukuoka Financial and Kinder Morgan

0.11

Correlation Coefficient

Fukuoka Financial  Kinder Morgan

Average diversification

The 3 months correlation between Fukuoka and Kinder is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fukuoka Financial Group and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Fukuoka Financial 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 Fukuoka Financial Group are associated (or correlated) with Kinder Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinder Morgan has no effect on the direction of Fukuoka Financial i.e., Fukuoka Financial and Kinder Morgan go up and down completely randomly.

Pair Corralation between Fukuoka Financial and Kinder Morgan

Assuming the 90 days horizon Fukuoka Financial Group is expected to generate 0.69 times more return on investment than Kinder Morgan. However, Fukuoka Financial Group is 1.45 times less risky than Kinder Morgan. It trades about 0.09 of its potential returns per unit of risk. Kinder Morgan is currently generating about 0.04 per unit of risk. If you would invest  2,380  in Fukuoka Financial Group on December 27, 2024 and sell it today you would earn a total of  180.00  from holding Fukuoka Financial Group or generate 7.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Fukuoka Financial Group  vs.  Kinder Morgan

Fukuoka Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fukuoka Financial Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fukuoka Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kinder Morgan

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinder Morgan are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Kinder Morgan is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fukuoka Financial and Kinder Morgan

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

The idea behind Fukuoka Financial Group and Kinder Morgan 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.