Correlation Between Kodiak Gas and Where Food

Can any of the company-specific risk be diversified away by investing in both Kodiak Gas and Where Food 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 Kodiak Gas and Where Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kodiak Gas Services, and Where Food Comes, you can compare the effects of market volatilities on Kodiak Gas and Where Food 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 Kodiak Gas with a short position of Where Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Gas and Where Food.

Diversification Opportunities for Kodiak Gas and Where Food

0.82

Correlation Coefficient

Kodiak Gas  Where Food

Very poor diversification

The 3 months correlation between Kodiak and Where is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Gas Services, and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes and Kodiak Gas 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 Kodiak Gas Services, are associated (or correlated) with Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Kodiak Gas i.e., Kodiak Gas and Where Food go up and down completely randomly.

Pair Corralation between Kodiak Gas and Where Food

Considering the 90-day investment horizon Kodiak Gas Services, is expected to generate 1.16 times more return on investment than Where Food. However, Kodiak Gas is 1.16 times more volatile than Where Food Comes. It trades about 0.22 of its potential returns per unit of risk. Where Food Comes is currently generating about 0.12 per unit of risk. If you would invest  2,926  in Kodiak Gas Services, on September 22, 2024 and sell it today you would earn a total of  1,054  from holding Kodiak Gas Services, or generate 36.02% return on investment over 90 days.

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

Kodiak Gas Services,  vs.  Where Food Comes

Kodiak Gas Services,

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kodiak Gas Services, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Kodiak Gas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Where Food Comes

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kodiak Gas and Where Food

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

The idea behind Kodiak Gas Services, and Where Food Comes 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..