Correlation Between Kinetik Holdings and Brooge Holdings

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

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

Diversification Opportunities for Kinetik Holdings and Brooge Holdings

-0.35

Correlation Coefficient

Kinetik Holdings  Brooge Holdings

Very good diversification

The 3 months correlation between Kinetik and Brooge is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Brooge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Holdings and Kinetik Holdings 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 Kinetik Holdings are associated (or correlated) with Brooge Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Holdings has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Brooge Holdings go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Brooge Holdings

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Brooge Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Kinetik Holdings is 2.92 times less risky than Brooge Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Brooge Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  146.00  in Brooge Holdings on December 28, 2024 and sell it today you would lose (16.00) from holding Brooge Holdings or give up 10.96% of portfolio value over 90 days.

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

Kinetik Holdings  vs.  Brooge Holdings

Kinetik Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetik Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Brooge Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kinetik Holdings and Brooge Holdings

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

The idea behind Kinetik Holdings and Brooge Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.