Correlation Between Kinetik Holdings and Awilco Drilling
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Awilco Drilling 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 Kinetik Holdings and Awilco Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Awilco Drilling PLC, you can compare the effects of market volatilities on Kinetik Holdings and Awilco Drilling 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 Kinetik Holdings with a short position of Awilco Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Awilco Drilling.
Diversification Opportunities for Kinetik Holdings and Awilco Drilling
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetik and Awilco is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC and Kinetik Holdings 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 Kinetik Holdings are associated (or correlated) with Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Awilco Drilling go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Awilco Drilling
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 3.65 times more return on investment than Awilco Drilling. However, Kinetik Holdings is 3.65 times more volatile than Awilco Drilling PLC. It trades about 0.02 of its potential returns per unit of risk. Awilco Drilling PLC is currently generating about -0.21 per unit of risk. If you would invest 5,615 in Kinetik Holdings on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Kinetik Holdings or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinetik Holdings vs. Awilco Drilling PLC
Performance |
| Timeline |
| Kinetik Holdings |
| Awilco Drilling PLC |
Kinetik Holdings and Awilco Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Awilco Drilling
The main advantage of trading using opposite Kinetik Holdings and Awilco Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Awilco Drilling 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 Awilco Drilling will offset losses from the drop in Awilco Drilling's long position.| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
| Awilco Drilling vs. Kinetik Holdings | Awilco Drilling vs. Kaltura | Awilco Drilling vs. Empresa Distribuidora y | Awilco Drilling vs. Black Hills |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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