Correlation Between Kodiak Gas and Forum Energy
Can any of the company-specific risk be diversified away by investing in both Kodiak Gas and Forum Energy 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 Kodiak Gas and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kodiak Gas Services, and Forum Energy Technologies, you can compare the effects of market volatilities on Kodiak Gas and Forum Energy 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 Kodiak Gas with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Gas and Forum Energy.
Diversification Opportunities for Kodiak Gas and Forum Energy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kodiak and Forum is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Gas Services, and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and Kodiak Gas 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 Kodiak Gas Services, are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of Kodiak Gas i.e., Kodiak Gas and Forum Energy go up and down completely randomly.
Pair Corralation between Kodiak Gas and Forum Energy
Considering the 90-day investment horizon Kodiak Gas Services, is expected to under-perform the Forum Energy. In addition to that, Kodiak Gas is 1.59 times more volatile than Forum Energy Technologies. It trades about -0.03 of its total potential returns per unit of risk. Forum Energy Technologies is currently generating about 0.04 per unit of volatility. If you would invest 1,909 in Forum Energy Technologies on November 18, 2024 and sell it today you would earn a total of 28.00 from holding Forum Energy Technologies or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kodiak Gas Services, vs. Forum Energy Technologies
Performance |
| Timeline |
| Kodiak Gas Services, |
| Forum Energy Technologies |
Kodiak Gas and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kodiak Gas and Forum Energy
The main advantage of trading using opposite Kodiak Gas and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Gas position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| Kodiak Gas vs. First Ship Lease | Kodiak Gas vs. Air Lease | Kodiak Gas vs. RCI Hospitality Holdings | Kodiak Gas vs. U Haul Holding |
| Forum Energy vs. Natural Gas Services | Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Bristow Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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