Correlation Between Kinetik Holdings and BAXALTA

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

By analyzing existing cross correlation between Kinetik Holdings and BAXALTA INC 525, you can compare the effects of market volatilities on Kinetik Holdings and BAXALTA 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 BAXALTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and BAXALTA.

Diversification Opportunities for Kinetik Holdings and BAXALTA

-0.67

Correlation Coefficient

Kinetik Holdings  BAXALTA

Excellent diversification

The 3 months correlation between Kinetik and BAXALTA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and BAXALTA INC 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAXALTA INC 525 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 BAXALTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAXALTA INC 525 has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and BAXALTA go up and down completely randomly.

Pair Corralation between Kinetik Holdings and BAXALTA

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the BAXALTA. In addition to that, Kinetik Holdings is 1.5 times more volatile than BAXALTA INC 525. It trades about -0.05 of its total potential returns per unit of risk. BAXALTA INC 525 is currently generating about -0.03 per unit of volatility. If you would invest  9,221  in BAXALTA INC 525 on December 24, 2024 and sell it today you would lose (84.00) from holding BAXALTA INC 525 or give up 0.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.33%
Values	Daily Returns

Kinetik Holdings  vs.  BAXALTA INC 525

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.

BAXALTA INC 525

Risk-Adjusted Performance

Very Weak

Over the last 90 days BAXALTA INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAXALTA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinetik Holdings and BAXALTA

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

The idea behind Kinetik Holdings and BAXALTA INC 525 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.