Correlation Between Kinetik Holdings and Genesis Energy
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Genesis Energy 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 Genesis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Genesis Energy LP, you can compare the effects of market volatilities on Kinetik Holdings and Genesis Energy 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 Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Genesis Energy.
Diversification Opportunities for Kinetik Holdings and Genesis Energy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetik and Genesis is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Genesis Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy LP 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 Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy LP has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Genesis Energy go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Genesis Energy
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.79 times more return on investment than Genesis Energy. However, Kinetik Holdings is 1.26 times less risky than Genesis Energy. It trades about 0.12 of its potential returns per unit of risk. Genesis Energy LP is currently generating about 0.02 per unit of risk. If you would invest 2,517 in Kinetik Holdings on August 27, 2024 and sell it today you would earn a total of 3,648 from holding Kinetik Holdings or generate 144.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetik Holdings vs. Genesis Energy LP
Performance |
| Timeline |
| Kinetik Holdings |
| Genesis Energy LP |
Kinetik Holdings and Genesis Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Genesis Energy
The main advantage of trading using opposite Kinetik Holdings and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Genesis Energy 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 Genesis Energy will offset losses from the drop in Genesis Energy'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 |
| Genesis Energy vs. Brooge Holdings | Genesis Energy vs. Plains All American | Genesis Energy vs. Western Midstream Partners | Genesis Energy vs. Hess Midstream Partners |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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