Correlation Between Global Ship and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both Global Ship and Kinder Morgan 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 Global Ship and Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Kinder Morgan, you can compare the effects of market volatilities on Global Ship and Kinder Morgan 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 Global Ship with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Kinder Morgan.
Diversification Opportunities for Global Ship and Kinder Morgan
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Kinder is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Global Ship 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 Global Ship Lease are associated (or correlated) with Kinder Morgan. 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 has no effect on the direction of Global Ship i.e., Global Ship and Kinder Morgan go up and down completely randomly.
Pair Corralation between Global Ship and Kinder Morgan
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Kinder Morgan. In addition to that, Global Ship is 1.19 times more volatile than Kinder Morgan. It trades about -0.06 of its total potential returns per unit of risk. Kinder Morgan is currently generating about 0.02 per unit of volatility. If you would invest 2,563 in Kinder Morgan on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Kinder Morgan or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Kinder Morgan
Performance |
| Timeline |
| Global Ship Lease |
| Kinder Morgan |
Global Ship and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Kinder Morgan
The main advantage of trading using opposite Global Ship and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Kinder Morgan 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 Morgan will offset losses from the drop in Kinder Morgan's long position.| Global Ship vs. Superior Plus Corp | Global Ship vs. SIVERS SEMICONDUCTORS AB | Global Ship vs. CHINA HUARONG ENERHD 50 | Global Ship vs. NORDIC HALIBUT AS |
| Kinder Morgan vs. TC Energy | Kinder Morgan vs. Pembina Pipeline Corp | Kinder Morgan vs. Superior Plus Corp | Kinder Morgan vs. SIVERS SEMICONDUCTORS AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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