Correlation Between Kinetik Holdings and Martin Midstream

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

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

Diversification Opportunities for Kinetik Holdings and Martin Midstream

-0.29

Correlation Coefficient

Kinetik Holdings  Martin Midstream

Very good diversification

The 3 months correlation between Kinetik and Martin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Martin Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Midstream Partners 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 Martin Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Midstream Partners has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Martin Midstream go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Martin Midstream

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Martin Midstream. In addition to that, Kinetik Holdings is 1.05 times more volatile than Martin Midstream Partners. It trades about -0.05 of its total potential returns per unit of risk. Martin Midstream Partners is currently generating about 0.0 per unit of volatility. If you would invest  361.00  in Martin Midstream Partners on December 29, 2024 and sell it today you would lose (5.00) from holding Martin Midstream Partners or give up 1.39% 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.  Martin Midstream Partners

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.

Martin Midstream Partners

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kinetik Holdings and Martin Midstream

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

The idea behind Kinetik Holdings and Martin Midstream Partners 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.