Correlation Between Kinetik Holdings and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Titan Machinery 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 Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Titan Machinery, you can compare the effects of market volatilities on Kinetik Holdings and Titan Machinery 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 Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Titan Machinery.
Diversification Opportunities for Kinetik Holdings and Titan Machinery
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetik and Titan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Titan Machinery go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Titan Machinery
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.62 times more return on investment than Titan Machinery. However, Kinetik Holdings is 1.61 times less risky than Titan Machinery. It trades about 0.19 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.03 per unit of risk. If you would invest 3,871 in Kinetik Holdings on September 1, 2024 and sell it today you would earn a total of 2,031 from holding Kinetik Holdings or generate 52.47% 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. Titan Machinery
Performance |
| Timeline |
| Kinetik Holdings |
| Titan Machinery |
Kinetik Holdings and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Titan Machinery
The main advantage of trading using opposite Kinetik Holdings and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery'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 |
| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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