Correlation Between Kinetik Holdings and Union Electric
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Union Electric, you can compare the effects of market volatilities on Kinetik Holdings and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Union Electric.
Diversification Opportunities for Kinetik Holdings and Union Electric
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetik and Union is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Union Electric go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Union Electric
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.87 times more return on investment than Union Electric. However, Kinetik Holdings is 1.15 times less risky than Union Electric. It trades about 0.3 of its potential returns per unit of risk. Union Electric is currently generating about 0.17 per unit of risk. If you would invest 4,874 in Kinetik Holdings on September 4, 2024 and sell it today you would earn a total of 844.00 from holding Kinetik Holdings or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kinetik Holdings vs. Union Electric
Performance |
| Timeline |
| Kinetik Holdings |
| Union Electric |
Kinetik Holdings and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and Union Electric
The main advantage of trading using opposite Kinetik Holdings and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric'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 |
| Union Electric vs. Afya | Union Electric vs. NRG Energy | Union Electric vs. CenterPoint Energy | Union Electric vs. Skillful Craftsman Education |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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