Correlation Between Kinetik Holdings and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Corporacion America 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 Corporacion America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Corporacion America Airports, you can compare the effects of market volatilities on Kinetik Holdings and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Corporacion America.
Diversification Opportunities for Kinetik Holdings and Corporacion America
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetik and Corporacion is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Corporacion America go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Corporacion America
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.98 times more return on investment than Corporacion America. However, Kinetik Holdings is 1.02 times less risky than Corporacion America. It trades about 0.39 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.02 per unit of risk. If you would invest 4,874 in Kinetik Holdings on September 3, 2024 and sell it today you would earn a total of 1,028 from holding Kinetik Holdings or generate 21.09% 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. Corporacion America Airports
Performance |
| Timeline |
| Kinetik Holdings |
| Corporacion America |
Kinetik Holdings and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Corporacion America
The main advantage of trading using opposite Kinetik Holdings and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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