Correlation Between United Homes and KINDER

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

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

Diversification Opportunities for United Homes and KINDER

-0.35

Correlation Coefficient

United Homes  KINDER

Very good diversification

The 3 months correlation between United and KINDER is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and KINDER MORGAN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN INC and United Homes 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 United Homes Group 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 INC has no effect on the direction of United Homes i.e., United Homes and KINDER go up and down completely randomly.

Pair Corralation between United Homes and KINDER

Considering the 90-day investment horizon United Homes Group is expected to under-perform the KINDER. In addition to that, United Homes is 4.13 times more volatile than KINDER MORGAN INC. It trades about -0.07 of its total potential returns per unit of risk. KINDER MORGAN INC is currently generating about 0.01 per unit of volatility. If you would invest  9,328  in KINDER MORGAN INC on December 24, 2024 and sell it today you would earn a total of  28.00  from holding KINDER MORGAN INC or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

United Homes Group  vs.  KINDER MORGAN INC

United Homes Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Homes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KINDER MORGAN INC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with United Homes and KINDER

The main advantage of trading using opposite United Homes and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes 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 United Homes Group and KINDER MORGAN INC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.