Correlation Between Scorpio Tankers and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both Scorpio Tankers 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 Scorpio Tankers and Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scorpio Tankers and Kinder Morgan, you can compare the effects of market volatilities on Scorpio Tankers 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 Scorpio Tankers with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scorpio Tankers and Kinder Morgan.
Diversification Opportunities for Scorpio Tankers and Kinder Morgan
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scorpio and Kinder is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Scorpio Tankers and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Scorpio Tankers 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 Scorpio Tankers 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 Scorpio Tankers i.e., Scorpio Tankers and Kinder Morgan go up and down completely randomly.
Pair Corralation between Scorpio Tankers and Kinder Morgan
Given the investment horizon of 90 days Scorpio Tankers is expected to under-perform the Kinder Morgan. In addition to that, Scorpio Tankers is 1.33 times more volatile than Kinder Morgan. It trades about -0.14 of its total potential returns per unit of risk. Kinder Morgan is currently generating about 0.17 per unit of volatility. If you would invest 2,131 in Kinder Morgan on November 2, 2024 and sell it today you would earn a total of 679.00 from holding Kinder Morgan or generate 31.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scorpio Tankers vs. Kinder Morgan
Performance |
| Timeline |
| Scorpio Tankers |
| Kinder Morgan |
Scorpio Tankers and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scorpio Tankers and Kinder Morgan
The main advantage of trading using opposite Scorpio Tankers and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scorpio Tankers 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.| Scorpio Tankers vs. Teekay Tankers | Scorpio Tankers vs. Navigator Holdings | Scorpio Tankers vs. DHT Holdings | Scorpio Tankers vs. Frontline |
| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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