Correlation Between 8426EPAF5 and Kinetik Holdings

Can any of the company-specific risk be diversified away by investing in both 8426EPAF5 and Kinetik Holdings 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 8426EPAF5 and Kinetik Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SO 515 15 SEP 32 and Kinetik Holdings, you can compare the effects of market volatilities on 8426EPAF5 and Kinetik Holdings 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 8426EPAF5 with a short position of Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 8426EPAF5 and Kinetik Holdings.

Diversification Opportunities for 8426EPAF5 and Kinetik Holdings

-0.54

Correlation Coefficient

8426EPAF5  Kinetik Holdings

Excellent diversification

The 3 months correlation between 8426EPAF5 and Kinetik is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SO 515 15 SEP 32 and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings and 8426EPAF5 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 SO 515 15 SEP 32 are associated (or correlated) with Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of 8426EPAF5 i.e., 8426EPAF5 and Kinetik Holdings go up and down completely randomly.

Pair Corralation between 8426EPAF5 and Kinetik Holdings

Assuming the 90 days trading horizon 8426EPAF5 is expected to generate 20.39 times less return on investment than Kinetik Holdings. But when comparing it to its historical volatility, SO 515 15 SEP 32 is 1.79 times less risky than Kinetik Holdings. It trades about 0.01 of its potential returns per unit of risk. Kinetik Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,793  in Kinetik Holdings on September 20, 2024 and sell it today you would earn a total of  2,664  from holding Kinetik Holdings or generate 95.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.73%
Values	Daily Returns

SO 515 15 SEP 32  vs.  Kinetik Holdings

SO 515 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SO 515 15 SEP 32 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 8426EPAF5 is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Kinetik Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 8426EPAF5 and Kinetik Holdings

The main advantage of trading using opposite 8426EPAF5 and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 8426EPAF5 position performs unexpectedly, Kinetik Holdings 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 Kinetik Holdings will offset losses from the drop in Kinetik Holdings' long position.

The idea behind SO 515 15 SEP 32 and Kinetik Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .