Correlation Between Kinder Morgan and GasLog Partners
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and GasLog Partners 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 GasLog Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and GasLog Partners LP, you can compare the effects of market volatilities on Kinder Morgan and GasLog Partners 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 GasLog Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and GasLog Partners.
Diversification Opportunities for Kinder Morgan and GasLog Partners
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinder and GasLog is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and GasLog Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GasLog Partners LP 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 GasLog Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GasLog Partners LP has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and GasLog Partners go up and down completely randomly.
Pair Corralation between Kinder Morgan and GasLog Partners
Considering the 90-day investment horizon Kinder Morgan is expected to generate 4.16 times more return on investment than GasLog Partners. However, Kinder Morgan is 4.16 times more volatile than GasLog Partners LP. It trades about 0.29 of its potential returns per unit of risk. GasLog Partners LP is currently generating about 0.15 per unit of risk. If you would invest 2,070 in Kinder Morgan on September 12, 2024 and sell it today you would earn a total of 625.00 from holding Kinder Morgan or generate 30.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinder Morgan vs. GasLog Partners LP
Performance |
| Timeline |
| Kinder Morgan |
| GasLog Partners LP |
Kinder Morgan and GasLog Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and GasLog Partners
The main advantage of trading using opposite Kinder Morgan and GasLog Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, GasLog Partners 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 GasLog Partners will offset losses from the drop in GasLog Partners' long position.| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
| GasLog Partners vs. GasLog Partners LP | GasLog Partners vs. Seapeak LLC | GasLog Partners vs. Dynagas LNG Partners | GasLog Partners vs. GasLog Partners 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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