Correlation Between Kinetik Holdings and CureVac NV

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

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

Diversification Opportunities for Kinetik Holdings and CureVac NV

0.55

Correlation Coefficient

Kinetik Holdings  CureVac NV

Very weak diversification

The 3 months correlation between Kinetik and CureVac is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and CureVac NV go up and down completely randomly.

Pair Corralation between Kinetik Holdings and CureVac NV

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.42 times more return on investment than CureVac NV. However, Kinetik Holdings is 2.37 times less risky than CureVac NV. It trades about 0.12 of its potential returns per unit of risk. CureVac NV is currently generating about -0.03 per unit of risk. If you would invest  2,517  in Kinetik Holdings on October 26, 2024 and sell it today you would earn a total of  4,108  from holding Kinetik Holdings or generate 163.21% return on investment over 90 days.

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

Kinetik Holdings  vs.  CureVac NV

Kinetik Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

CureVac NV

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CureVac NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetik Holdings and CureVac NV

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

The idea behind Kinetik Holdings and CureVac NV 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.