Correlation Between Energy Transfer and Kodiak Copper
Can any of the company-specific risk be diversified away by investing in both Energy Transfer and Kodiak Copper 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 Energy Transfer and Kodiak Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Transfer LP and Kodiak Copper Corp, you can compare the effects of market volatilities on Energy Transfer and Kodiak Copper 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 Energy Transfer with a short position of Kodiak Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and Kodiak Copper.
Diversification Opportunities for Energy Transfer and Kodiak Copper
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energy and Kodiak is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper Corp and Energy Transfer 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 Energy Transfer LP are associated (or correlated) with Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of Energy Transfer i.e., Energy Transfer and Kodiak Copper go up and down completely randomly.
Pair Corralation between Energy Transfer and Kodiak Copper
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 0.38 times more return on investment than Kodiak Copper. However, Energy Transfer LP is 2.6 times less risky than Kodiak Copper. It trades about 0.69 of its potential returns per unit of risk. Kodiak Copper Corp is currently generating about -0.2 per unit of risk. If you would invest 1,608 in Energy Transfer LP on August 30, 2024 and sell it today you would earn a total of 334.00 from holding Energy Transfer LP or generate 20.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Transfer LP vs. Kodiak Copper Corp
Performance |
| Timeline |
| Energy Transfer LP |
| Kodiak Copper Corp |
Energy Transfer and Kodiak Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and Kodiak Copper
The main advantage of trading using opposite Energy Transfer and Kodiak Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer position performs unexpectedly, Kodiak Copper 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 Kodiak Copper will offset losses from the drop in Kodiak Copper's long position.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
| Kodiak Copper vs. Silver Tiger Metals | Kodiak Copper vs. P2 Gold | Kodiak Copper vs. Integra Resources Corp | Kodiak Copper vs. SilverCrest Metals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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