Correlation Between Holly Energy and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both Holly Energy 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 Holly Energy and Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holly Energy Partners and Kinder Morgan, you can compare the effects of market volatilities on Holly Energy 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 Holly Energy with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holly Energy and Kinder Morgan.
Diversification Opportunities for Holly Energy and Kinder Morgan
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Holly and Kinder is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Holly Energy Partners and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Holly Energy 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 Holly Energy Partners 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 Holly Energy i.e., Holly Energy and Kinder Morgan go up and down completely randomly.
Pair Corralation between Holly Energy and Kinder Morgan
If you would invest 2,451 in Kinder Morgan on August 27, 2024 and sell it today you would earn a total of 398.00 from holding Kinder Morgan or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Holly Energy Partners vs. Kinder Morgan
Performance |
| Timeline |
| Holly Energy Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kinder Morgan |
Holly Energy and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holly Energy and Kinder Morgan
The main advantage of trading using opposite Holly Energy and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holly Energy 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.| Holly Energy vs. MPLX LP | Holly Energy vs. Western Midstream Partners | Holly Energy vs. Plains All American | Holly Energy vs. Genesis Energy LP |
| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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