Correlation Between KINDER and Global E

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

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

Diversification Opportunities for KINDER and Global E

-0.19

Correlation Coefficient

KINDER  Global E

Good diversification

The 3 months correlation between KINDER and Global is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding KINDER MORGAN INC and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and KINDER 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 KINDER MORGAN INC are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of KINDER i.e., KINDER and Global E go up and down completely randomly.

Pair Corralation between KINDER and Global E

Assuming the 90 days trading horizon KINDER MORGAN INC is expected to generate 0.5 times more return on investment than Global E. However, KINDER MORGAN INC is 1.99 times less risky than Global E. It trades about -0.1 of its potential returns per unit of risk. Global E Online is currently generating about -0.17 per unit of risk. If you would invest  6,762  in KINDER MORGAN INC on December 24, 2024 and sell it today you would lose (644.00) from holding KINDER MORGAN INC or give up 9.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

KINDER MORGAN INC  vs.  Global E Online

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 latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KINDER MORGAN INC investors.

Global E Online

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global E Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with KINDER and Global E

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

The idea behind KINDER MORGAN INC and Global E Online 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.