Correlation Between Kinder Morgan and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and Xinhua Winshare 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 Morgan and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Kinder Morgan and Xinhua Winshare 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 Morgan with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Xinhua Winshare.
Diversification Opportunities for Kinder Morgan and Xinhua Winshare
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinder and Xinhua is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and Kinder Morgan 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 are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Kinder Morgan and Xinhua Winshare
Assuming the 90 days horizon Kinder Morgan is expected to generate 0.64 times more return on investment than Xinhua Winshare. However, Kinder Morgan is 1.57 times less risky than Xinhua Winshare. It trades about 0.19 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.09 per unit of risk. If you would invest 1,767 in Kinder Morgan on September 5, 2024 and sell it today you would earn a total of 847.00 from holding Kinder Morgan or generate 47.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinder Morgan vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Kinder Morgan |
| Xinhua Winshare Publ |
Kinder Morgan and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and Xinhua Winshare
The main advantage of trading using opposite Kinder Morgan and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Kinder Morgan vs. Xinhua Winshare Publishing | Kinder Morgan vs. Global Ship Lease | Kinder Morgan vs. Adtalem Global Education | Kinder Morgan vs. FUYO GENERAL LEASE |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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