Correlation Between High Performance and Kodiak Gas

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

By analyzing existing cross correlation between High Performance Beverages and Kodiak Gas Services,, you can compare the effects of market volatilities on High Performance and Kodiak Gas 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 High Performance with a short position of Kodiak Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Performance and Kodiak Gas.

Diversification Opportunities for High Performance and Kodiak Gas

0.0

Correlation Coefficient

High Performance  Kodiak Gas

Pay attention - limited upside

The 3 months correlation between High and Kodiak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Performance Beverages and Kodiak Gas Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Gas Services, and High Performance 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 High Performance Beverages are associated (or correlated) with Kodiak Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Gas Services, has no effect on the direction of High Performance i.e., High Performance and Kodiak Gas go up and down completely randomly.

Pair Corralation between High Performance and Kodiak Gas

If you would invest  4,166  in Kodiak Gas Services, on October 11, 2024 and sell it today you would earn a total of  2.00  from holding Kodiak Gas Services, or generate 0.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

High Performance Beverages  vs.  Kodiak Gas Services,

High Performance Bev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Performance Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, High Performance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kodiak Gas Services,

Risk-Adjusted Performance

16 of 100

Solid

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

Pair Trading with High Performance and Kodiak Gas

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

The idea behind High Performance Beverages and Kodiak Gas Services, 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.

Check out your portfolio center.

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.