Correlation Between Kinetik Holdings and GE Vernova

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

By analyzing existing cross correlation between Kinetik Holdings and GE Vernova LLC, you can compare the effects of market volatilities on Kinetik Holdings and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and GE Vernova.

Diversification Opportunities for Kinetik Holdings and GE Vernova

0.93

Correlation Coefficient

Kinetik Holdings  GE Vernova

Almost no diversification

The 3 months correlation between Kinetik and GEV is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and GE Vernova go up and down completely randomly.

Pair Corralation between Kinetik Holdings and GE Vernova

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.76 times more return on investment than GE Vernova. However, Kinetik Holdings is 1.32 times less risky than GE Vernova. It trades about 0.29 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.22 per unit of risk. If you would invest  4,874  in Kinetik Holdings on September 5, 2024 and sell it today you would earn a total of  834.00  from holding Kinetik Holdings or generate 17.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Kinetik Holdings  vs.  GE Vernova LLC

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 unsteady basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

GE Vernova LLC

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetik Holdings and GE Vernova

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

The idea behind Kinetik Holdings and GE Vernova LLC 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 Transaction History module to view history of all your transactions and understand their impact on performance.