Correlation Between Kinetik Holdings and TWFG,

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

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

Diversification Opportunities for Kinetik Holdings and TWFG,

0.68

Correlation Coefficient

Kinetik Holdings  TWFG,

Poor diversification

The 3 months correlation between Kinetik and TWFG, is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and TWFG, go up and down completely randomly.

Pair Corralation between Kinetik Holdings and TWFG,

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.86 times more return on investment than TWFG,. However, Kinetik Holdings is 1.17 times less risky than TWFG,. It trades about -0.06 of its potential returns per unit of risk. TWFG, Class A is currently generating about -0.26 per unit of risk. 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Kinetik Holdings  vs.  TWFG, Class A

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.

TWFG, Class A

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, TWFG, is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kinetik Holdings and TWFG,

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

The idea behind Kinetik Holdings and TWFG, Class A 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.