Correlation Between Kinetik Holdings and Safety Shot

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

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

Diversification Opportunities for Kinetik Holdings and Safety Shot

-0.79

Correlation Coefficient

Kinetik Holdings  Safety Shot

Pay attention - limited upside

The 3 months correlation between Kinetik and Safety is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and Safety Shot go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Safety Shot

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.48 times more return on investment than Safety Shot. However, Kinetik Holdings is 2.07 times less risky than Safety Shot. It trades about 0.2 of its potential returns per unit of risk. Safety Shot is currently generating about -0.13 per unit of risk. If you would invest  4,455  in Kinetik Holdings on September 28, 2024 and sell it today you would earn a total of  1,246  from holding Kinetik Holdings or generate 27.97% return on investment over 90 days.

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

Kinetik Holdings  vs.  Safety Shot

Kinetik Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 15 (%) 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.

Safety Shot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safety Shot 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 basic indicators 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.

Pair Trading with Kinetik Holdings and Safety Shot

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

The idea behind Kinetik Holdings and Safety Shot 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.