Correlation Between Castor Maritime and Kinetik Holdings

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

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

Diversification Opportunities for Castor Maritime and Kinetik Holdings

-0.77

Correlation Coefficient

Castor Maritime  Kinetik Holdings

Pay attention - limited upside

The 3 months correlation between Castor and Kinetik is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings and Castor Maritime 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 Castor Maritime 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 Castor Maritime i.e., Castor Maritime and Kinetik Holdings go up and down completely randomly.

Pair Corralation between Castor Maritime and Kinetik Holdings

Given the investment horizon of 90 days Castor Maritime is expected to under-perform the Kinetik Holdings. In addition to that, Castor Maritime is 1.57 times more volatile than Kinetik Holdings. It trades about -0.29 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about -0.06 per unit of volatility. If you would invest  5,918  in Kinetik Holdings on September 26, 2024 and sell it today you would lose (183.00) from holding Kinetik Holdings or give up 3.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Castor Maritime  vs.  Kinetik Holdings

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kinetik Holdings

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 16 (%) 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.

Pair Trading with Castor Maritime and Kinetik Holdings

The main advantage of trading using opposite Castor Maritime and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castor Maritime 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.

The idea behind Castor Maritime and Kinetik 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..