Correlation Between Navigator Holdings and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both Navigator Holdings and Kinder Morgan 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 Navigator Holdings and Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navigator Holdings and Kinder Morgan, you can compare the effects of market volatilities on Navigator Holdings and Kinder Morgan 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 Navigator Holdings with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Holdings and Kinder Morgan.
Diversification Opportunities for Navigator Holdings and Kinder Morgan
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Navigator and Kinder is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Holdings and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Navigator 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 Navigator Holdings are associated (or correlated) with Kinder Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinder Morgan has no effect on the direction of Navigator Holdings i.e., Navigator Holdings and Kinder Morgan go up and down completely randomly.
Pair Corralation between Navigator Holdings and Kinder Morgan
Given the investment horizon of 90 days Navigator Holdings is expected to generate 10.2 times less return on investment than Kinder Morgan. But when comparing it to its historical volatility, Navigator Holdings is 1.19 times less risky than Kinder Morgan. It trades about 0.05 of its potential returns per unit of risk. Kinder Morgan is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 2,448 in Kinder Morgan on August 24, 2024 and sell it today you would earn a total of 406.00 from holding Kinder Morgan or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navigator Holdings vs. Kinder Morgan
Performance |
| Timeline |
| Navigator Holdings |
| Kinder Morgan |
Navigator Holdings and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navigator Holdings and Kinder Morgan
The main advantage of trading using opposite Navigator Holdings and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Holdings position performs unexpectedly, Kinder Morgan 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 Kinder Morgan will offset losses from the drop in Kinder Morgan's long position.| Navigator Holdings vs. Scorpio Tankers | Navigator Holdings vs. Teekay Tankers | Navigator Holdings vs. International Seaways | Navigator Holdings vs. Frontline |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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