Correlation Between Kinetik Holdings and Mirage Energy

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

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

Diversification Opportunities for Kinetik Holdings and Mirage Energy

0.39

Correlation Coefficient

Kinetik Holdings  Mirage Energy

Weak diversification

The 3 months correlation between Kinetik and Mirage is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Mirage Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirage Energy Corp 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 Mirage Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirage Energy Corp has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Mirage Energy go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Mirage Energy

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Mirage Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kinetik Holdings is 67.38 times less risky than Mirage Energy. The stock trades about -0.09 of its potential returns per unit of risk. The Mirage Energy Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Mirage Energy Corp on September 30, 2024 and sell it today you would lose (3.40) from holding Mirage Energy Corp or give up 85.0% of portfolio value over 90 days.

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

Kinetik Holdings  vs.  Mirage Energy Corp

Kinetik Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 14 (%) 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.

Mirage Energy Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mirage Energy Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mirage Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetik Holdings and Mirage Energy

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

The idea behind Kinetik Holdings and Mirage Energy Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.