Correlation Between Safety Shot and KINDER

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

By analyzing existing cross correlation between Safety Shot and KINDER MORGAN FIN, you can compare the effects of market volatilities on Safety Shot and KINDER 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 Safety Shot with a short position of KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and KINDER.

Diversification Opportunities for Safety Shot and KINDER

-0.13

Correlation Coefficient

Safety Shot  KINDER

Good diversification

The 3 months correlation between Safety and KINDER is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and KINDER MORGAN FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN FIN and Safety Shot 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 Safety Shot are associated (or correlated) with KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN FIN has no effect on the direction of Safety Shot i.e., Safety Shot and KINDER go up and down completely randomly.

Pair Corralation between Safety Shot and KINDER

Given the investment horizon of 90 days Safety Shot is expected to under-perform the KINDER. In addition to that, Safety Shot is 3.48 times more volatile than KINDER MORGAN FIN. It trades about -0.13 of its total potential returns per unit of risk. KINDER MORGAN FIN is currently generating about 0.16 per unit of volatility. If you would invest  10,066  in KINDER MORGAN FIN on December 29, 2024 and sell it today you would earn a total of  830.00  from holding KINDER MORGAN FIN or generate 8.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.46%
Values	Daily Returns

Safety Shot  vs.  KINDER MORGAN FIN

Safety Shot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KINDER MORGAN FIN

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KINDER MORGAN FIN are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, KINDER sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Safety Shot and KINDER

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

The idea behind Safety Shot and KINDER MORGAN FIN 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.