Correlation Between Kinetik Holdings and RAYTHEON

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

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

Diversification Opportunities for Kinetik Holdings and RAYTHEON

-0.55

Correlation Coefficient

Kinetik Holdings  RAYTHEON

Excellent diversification

The 3 months correlation between Kinetik and RAYTHEON is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and RAYTHEON TECHNOLOGIES PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAYTHEON TECHNOLOGIES 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 RAYTHEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAYTHEON TECHNOLOGIES has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and RAYTHEON go up and down completely randomly.

Pair Corralation between Kinetik Holdings and RAYTHEON

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 2.97 times more return on investment than RAYTHEON. However, Kinetik Holdings is 2.97 times more volatile than RAYTHEON TECHNOLOGIES PORATION. It trades about 0.05 of its potential returns per unit of risk. RAYTHEON TECHNOLOGIES PORATION is currently generating about 0.13 per unit of risk. If you would invest  5,752  in Kinetik Holdings on October 11, 2024 and sell it today you would earn a total of  213.00  from holding Kinetik Holdings or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.12%
Values	Daily Returns

Kinetik Holdings  vs.  RAYTHEON TECHNOLOGIES PORATION

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.

RAYTHEON TECHNOLOGIES

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RAYTHEON TECHNOLOGIES PORATION are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, RAYTHEON 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 RAYTHEON

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

The idea behind Kinetik Holdings and RAYTHEON TECHNOLOGIES PORATION 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.