Correlation Between KINDER and FiscalNote Holdings

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Can any of the company-specific risk be diversified away by investing in both KINDER and FiscalNote 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 KINDER and FiscalNote Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINDER MORGAN INC and FiscalNote Holdings, you can compare the effects of market volatilities on KINDER and FiscalNote 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 KINDER with a short position of FiscalNote Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINDER and FiscalNote Holdings.

Diversification Opportunities for KINDER and FiscalNote Holdings

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between KINDER and FiscalNote is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KINDER MORGAN INC and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings 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 INC are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of KINDER i.e., KINDER and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between KINDER and FiscalNote Holdings

Assuming the 90 days trading horizon KINDER MORGAN INC is expected to generate 6.14 times more return on investment than FiscalNote Holdings. However, KINDER is 6.14 times more volatile than FiscalNote Holdings. It trades about 0.04 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about -0.02 per unit of risk. If you would invest  9,721  in KINDER MORGAN INC on September 3, 2024 and sell it today you would lose (181.00) from holding KINDER MORGAN INC or give up 1.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy97.58%
ValuesDaily Returns

KINDER MORGAN INC  vs.  FiscalNote Holdings

 Performance 
       Timeline  
KINDER MORGAN INC 

Risk-Adjusted Performance

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Over the last 90 days KINDER MORGAN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
FiscalNote Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

KINDER and FiscalNote Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KINDER and FiscalNote Holdings

The main advantage of trading using opposite KINDER and FiscalNote Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINDER position performs unexpectedly, FiscalNote 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 FiscalNote Holdings will offset losses from the drop in FiscalNote Holdings' long position.
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The idea behind KINDER MORGAN INC and FiscalNote Holdings 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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