Correlation Between Kinetik Holdings and Black Hills
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Black Hills 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 Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Black Hills, you can compare the effects of market volatilities on Kinetik Holdings and Black Hills 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 Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Black Hills.
Diversification Opportunities for Kinetik Holdings and Black Hills
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetik and Black is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills 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 Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Black Hills go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Black Hills
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 1.35 times more return on investment than Black Hills. However, Kinetik Holdings is 1.35 times more volatile than Black Hills. It trades about 0.15 of its potential returns per unit of risk. Black Hills is currently generating about 0.09 per unit of risk. If you would invest 3,372 in Kinetik Holdings on August 26, 2024 and sell it today you would earn a total of 2,793 from holding Kinetik Holdings or generate 82.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetik Holdings vs. Black Hills
Performance |
| Timeline |
| Kinetik Holdings |
| Black Hills |
Kinetik Holdings and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Black Hills
The main advantage of trading using opposite Kinetik Holdings and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |