Correlation Between Kinder Morgan and International Seaways
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and International Seaways 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 International Seaways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and International Seaways, you can compare the effects of market volatilities on Kinder Morgan and International Seaways 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 International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and International Seaways.
Diversification Opportunities for Kinder Morgan and International Seaways
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinder and International is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways 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 International Seaways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Seaways has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and International Seaways go up and down completely randomly.
Pair Corralation between Kinder Morgan and International Seaways
Considering the 90-day investment horizon Kinder Morgan is expected to generate 1.22 times more return on investment than International Seaways. However, Kinder Morgan is 1.22 times more volatile than International Seaways. It trades about 0.34 of its potential returns per unit of risk. International Seaways is currently generating about -0.29 per unit of risk. If you would invest 2,451 in Kinder Morgan on August 28, 2024 and sell it today you would earn a total of 334.00 from holding Kinder Morgan or generate 13.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinder Morgan vs. International Seaways
Performance |
| Timeline |
| Kinder Morgan |
| International Seaways |
Kinder Morgan and International Seaways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and International Seaways
The main advantage of trading using opposite Kinder Morgan and International Seaways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, International Seaways 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 International Seaways will offset losses from the drop in International Seaways' long position.| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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