Correlation Between Kinetik Holdings and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Thor Industries 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 Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Thor Industries, you can compare the effects of market volatilities on Kinetik Holdings and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Thor Industries.
Diversification Opportunities for Kinetik Holdings and Thor Industries
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetik and Thor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Thor Industries go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Thor Industries
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.79 times more return on investment than Thor Industries. However, Kinetik Holdings is 1.27 times less risky than Thor Industries. It trades about 0.12 of its potential returns per unit of risk. Thor Industries is currently generating about 0.04 per unit of risk. If you would invest 2,917 in Kinetik Holdings on September 1, 2024 and sell it today you would earn a total of 2,985 from holding Kinetik Holdings or generate 102.33% 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. Thor Industries
Performance |
| Timeline |
| Kinetik Holdings |
| Thor Industries |
Kinetik Holdings and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Thor Industries
The main advantage of trading using opposite Kinetik Holdings and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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