Correlation Between Sable Offshore and Kinetik Holdings
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Kinetik Holdings 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 Sable Offshore and Kinetik Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sable Offshore Corp and Kinetik Holdings, you can compare the effects of market volatilities on Sable Offshore and Kinetik Holdings 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 Sable Offshore with a short position of Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Kinetik Holdings.
Diversification Opportunities for Sable Offshore and Kinetik Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sable and Kinetik is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings and Sable Offshore 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 Sable Offshore Corp are associated (or correlated) with Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Sable Offshore i.e., Sable Offshore and Kinetik Holdings go up and down completely randomly.
Pair Corralation between Sable Offshore and Kinetik Holdings
Considering the 90-day investment horizon Sable Offshore is expected to generate 4.07 times less return on investment than Kinetik Holdings. In addition to that, Sable Offshore is 2.53 times more volatile than Kinetik Holdings. It trades about 0.03 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.27 per unit of volatility. 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 |
Sable Offshore Corp vs. Kinetik Holdings
Performance |
| Timeline |
| Sable Offshore Corp |
| Kinetik Holdings |
Sable Offshore and Kinetik Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Kinetik Holdings
The main advantage of trading using opposite Sable Offshore and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Kinetik Holdings 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 Kinetik Holdings will offset losses from the drop in Kinetik Holdings' long position.| Sable Offshore vs. Dine Brands Global | Sable Offshore vs. RCI Hospitality Holdings | Sable Offshore vs. Sweetgreen | Sable Offshore vs. Dennys Corp |
| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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