Correlation Between Kinetik Holdings and Exchange Bankshares

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

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

Diversification Opportunities for Kinetik Holdings and Exchange Bankshares

-0.74

Correlation Coefficient

Kinetik Holdings  Exchange Bankshares

Pay attention - limited upside

The 3 months correlation between Kinetik and Exchange is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares 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 Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Exchange Bankshares go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Exchange Bankshares

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Exchange Bankshares. In addition to that, Kinetik Holdings is 12.46 times more volatile than Exchange Bankshares. It trades about -0.04 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.58 per unit of volatility. If you would invest  4,775  in Exchange Bankshares on December 22, 2024 and sell it today you would earn a total of  15.00  from holding Exchange Bankshares or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Kinetik Holdings  vs.  Exchange Bankshares

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 quite persistent basic indicators, Kinetik Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Exchange Bankshares

Risk-Adjusted Performance

Excellent

Over the last 90 days Exchange Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak fundamental indicators, Exchange Bankshares may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kinetik Holdings and Exchange Bankshares

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

The idea behind Kinetik Holdings and Exchange Bankshares 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .