Correlation Between KINDER and Dow Jones
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By analyzing existing cross correlation between KINDER MORGAN ENERGY and Dow Jones Industrial, you can compare the effects of market volatilities on KINDER and Dow Jones 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 KINDER with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINDER and Dow Jones.
Diversification Opportunities for KINDER and Dow Jones
Excellent diversification
The 3 months correlation between KINDER and Dow is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding KINDER MORGAN ENERGY and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and KINDER 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 KINDER MORGAN ENERGY are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of KINDER i.e., KINDER and Dow Jones go up and down completely randomly.
Pair Corralation between KINDER and Dow Jones
Assuming the 90 days trading horizon KINDER MORGAN ENERGY is expected to generate 113.36 times more return on investment than Dow Jones. However, KINDER is 113.36 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 11,065 in KINDER MORGAN ENERGY on September 3, 2024 and sell it today you would earn a total of 22.00 from holding KINDER MORGAN ENERGY or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.31% |
| Values | Daily Returns |
KINDER MORGAN ENERGY vs. Dow Jones Industrial
Performance |
| Timeline |
KINDER and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KINDER MORGAN ENERGY
Pair trading matchups for KINDER
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KINDER and Dow Jones
The main advantage of trading using opposite KINDER and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINDER position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.The idea behind KINDER MORGAN ENERGY and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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