Correlation Between Kinetik Holdings and KBL Merger

Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and KBL Merger 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 Kinetik Holdings and KBL Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinetik Holdings and KBL Merger Corp, you can compare the effects of market volatilities on Kinetik Holdings and KBL Merger 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 Kinetik Holdings with a short position of KBL Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and KBL Merger.

Diversification Opportunities for Kinetik Holdings and KBL Merger

0.0

Correlation Coefficient

Kinetik Holdings  KBL Merger

Pay attention - limited upside

The 3 months correlation between Kinetik and KBL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and KBL Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBL Merger Corp and Kinetik 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 Kinetik Holdings are associated (or correlated) with KBL Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBL Merger Corp has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and KBL Merger go up and down completely randomly.

Pair Corralation between Kinetik Holdings and KBL Merger

If you would invest (100.00) in KBL Merger Corp on February 4, 2024 and sell it today you would earn a total of  100.00  from holding KBL Merger Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kinetik Holdings  vs.  KBL Merger Corp

Kinetik Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

KBL Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KBL Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, KBL Merger is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kinetik Holdings and KBL Merger

The main advantage of trading using opposite Kinetik Holdings and KBL Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, KBL Merger 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 KBL Merger will offset losses from the drop in KBL Merger's long position.

The idea behind Kinetik Holdings and KBL Merger Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.