Correlation Between Kinetik Holdings and International Media

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

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

Diversification Opportunities for Kinetik Holdings and International Media

-0.62

Correlation Coefficient

Kinetik Holdings  International Media

Excellent diversification

The 3 months correlation between Kinetik and International is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and International Media go up and down completely randomly.

Pair Corralation between Kinetik Holdings and International Media

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 4.91 times less return on investment than International Media. But when comparing it to its historical volatility, Kinetik Holdings is 8.74 times less risky than International Media. It trades about 0.16 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.10  in International Media Acquisition on October 9, 2024 and sell it today you would earn a total of  0.90  from holding International Media Acquisition or generate 17.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.74%
Values	Daily Returns

Kinetik Holdings  vs.  International Media Acquisitio

Kinetik Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

International Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Media Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Media is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kinetik Holdings and International Media

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

The idea behind Kinetik Holdings and International Media Acquisition 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.