Correlation Between Kinetik Holdings and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Sable Offshore 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 Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Sable Offshore Corp, you can compare the effects of market volatilities on Kinetik Holdings and Sable Offshore 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 Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Sable Offshore.
Diversification Opportunities for Kinetik Holdings and Sable Offshore
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinetik and Sable is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Sable Offshore go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Sable Offshore
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.39 times more return on investment than Sable Offshore. However, Kinetik Holdings is 2.53 times less risky than Sable Offshore. It trades about 0.27 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.03 per unit of risk. If you would invest 4,273 in Kinetik Holdings on September 3, 2024 and sell it today you would earn a total of 1,629 from holding Kinetik Holdings or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetik Holdings vs. Sable Offshore Corp
Performance |
| Timeline |
| Kinetik Holdings |
| Sable Offshore Corp |
Kinetik Holdings and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Sable Offshore
The main advantage of trading using opposite Kinetik Holdings and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore'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 |
| Sable Offshore vs. Dine Brands Global | Sable Offshore vs. RCI Hospitality Holdings | Sable Offshore vs. Sweetgreen | Sable Offshore vs. Dennys Corp |
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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