Correlation Between Kinetik Holdings and Soma Gold

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

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

Diversification Opportunities for Kinetik Holdings and Soma Gold

-0.33

Correlation Coefficient

Kinetik Holdings  Soma Gold

Very good diversification

The 3 months correlation between Kinetik and Soma is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Soma Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soma Gold 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 Soma Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soma Gold Corp has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Soma Gold go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Soma Gold

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.58 times more return on investment than Soma Gold. However, Kinetik Holdings is 1.73 times less risky than Soma Gold. It trades about 0.15 of its potential returns per unit of risk. Soma Gold Corp is currently generating about 0.01 per unit of risk. If you would invest  4,140  in Kinetik Holdings on October 10, 2024 and sell it today you would earn a total of  1,802  from holding Kinetik Holdings or generate 43.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Kinetik Holdings  vs.  Soma Gold Corp

Kinetik Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 13 (%) 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.

Soma Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soma Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kinetik Holdings and Soma Gold

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

The idea behind Kinetik Holdings and Soma Gold 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 Commodity Directory module to find actively traded commodities issued by global exchanges.