Correlation Between Kinetik Holdings and Enagas SA

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

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

Diversification Opportunities for Kinetik Holdings and Enagas SA

-0.72

Correlation Coefficient

Kinetik Holdings  Enagas SA

Pay attention - limited upside

The 3 months correlation between Kinetik and Enagas is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA 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 Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Enagas SA go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Enagas SA

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Enagas SA. In addition to that, Kinetik Holdings is 1.49 times more volatile than Enagas SA. It trades about -0.15 of its total potential returns per unit of risk. Enagas SA is currently generating about 0.25 per unit of volatility. If you would invest  657.00  in Enagas SA on December 29, 2024 and sell it today you would earn a total of  58.00  from holding Enagas SA or generate 8.83% return on investment over 90 days.

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

Kinetik Holdings  vs.  Enagas SA

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.

Enagas SA

Risk-Adjusted Performance

Solid

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

Pair Trading with Kinetik Holdings and Enagas SA

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

The idea behind Kinetik Holdings and Enagas SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.