Correlation Between Kinder Morgan and Arcelormittal
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and Arcelormittal 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 Arcelormittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and Arcelormittal, you can compare the effects of market volatilities on Kinder Morgan and Arcelormittal 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 Arcelormittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Arcelormittal.
Diversification Opportunities for Kinder Morgan and Arcelormittal
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinder and Arcelormittal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Arcelormittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelormittal 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 Arcelormittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelormittal has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and Arcelormittal go up and down completely randomly.
Pair Corralation between Kinder Morgan and Arcelormittal
Considering the 90-day investment horizon Kinder Morgan is expected to generate 0.52 times more return on investment than Arcelormittal. However, Kinder Morgan is 1.94 times less risky than Arcelormittal. It trades about 0.14 of its potential returns per unit of risk. Arcelormittal is currently generating about -0.21 per unit of risk. If you would invest 1,544 in Kinder Morgan on August 30, 2024 and sell it today you would earn a total of 1,263 from holding Kinder Morgan or generate 81.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.28% |
| Values | Daily Returns |
Kinder Morgan vs. Arcelormittal
Performance |
| Timeline |
| Kinder Morgan |
| Arcelormittal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinder Morgan and Arcelormittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and Arcelormittal
The main advantage of trading using opposite Kinder Morgan and Arcelormittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, Arcelormittal 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 Arcelormittal will offset losses from the drop in Arcelormittal's long position.| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
| Arcelormittal vs. Affiliated Managers Group | Arcelormittal vs. Maiden Holdings North | Arcelormittal vs. Credit Enhanced Corts | Arcelormittal vs. Affiliated Managers 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |