Correlation Between Globus Maritime and Kinder Morgan

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

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

Diversification Opportunities for Globus Maritime and Kinder Morgan

-0.84

Correlation Coefficient

Globus Maritime  Kinder Morgan

Pay attention - limited upside

The 3 months correlation between Globus and Kinder is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and Globus 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 Globus Maritime 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 Globus Maritime i.e., Globus Maritime and Kinder Morgan go up and down completely randomly.

Pair Corralation between Globus Maritime and Kinder Morgan

Given the investment horizon of 90 days Globus Maritime is expected to under-perform the Kinder Morgan. In addition to that, Globus Maritime is 2.32 times more volatile than Kinder Morgan. It trades about -0.24 of its total potential returns per unit of risk. Kinder Morgan is currently generating about 0.22 per unit of volatility. If you would invest  2,196  in Kinder Morgan on September 24, 2024 and sell it today you would earn a total of  501.00  from holding Kinder Morgan or generate 22.81% return on investment over 90 days.

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

Globus Maritime  vs.  Kinder Morgan

Globus Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kinder Morgan

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinder Morgan are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, Kinder Morgan demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Maritime and Kinder Morgan

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

The idea behind Globus Maritime and Kinder Morgan 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.