Correlation Between Kinetik Holdings and Neo Concept

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

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

Diversification Opportunities for Kinetik Holdings and Neo Concept

0.19

Correlation Coefficient

Kinetik Holdings  Neo Concept

Average diversification

The 3 months correlation between Kinetik and Neo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat 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 Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Neo Concept go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Neo Concept

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 3.24 times less return on investment than Neo Concept. But when comparing it to its historical volatility, Kinetik Holdings is 8.2 times less risky than Neo Concept. It trades about 0.23 of its potential returns per unit of risk. Neo Concept International Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Neo Concept International Group on September 5, 2024 and sell it today you would earn a total of  9.00  from holding Neo Concept International Group or generate 20.45% return on investment over 90 days.

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

Kinetik Holdings  vs.  Neo Concept International Grou

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.

Neo Concept Internat

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Concept International Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Neo Concept demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetik Holdings and Neo Concept

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

The idea behind Kinetik Holdings and Neo Concept International Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..