Correlation Between KINDER and BCB Bancorp

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

By analyzing existing cross correlation between KINDER MORGAN INC and BCB Bancorp, you can compare the effects of market volatilities on KINDER and BCB Bancorp 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 KINDER with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINDER and BCB Bancorp.

Diversification Opportunities for KINDER and BCB Bancorp

0.04

Correlation Coefficient

KINDER  BCB Bancorp

Significant diversification

The 3 months correlation between KINDER and BCB is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding KINDER MORGAN INC and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and KINDER 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 KINDER MORGAN INC are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of KINDER i.e., KINDER and BCB Bancorp go up and down completely randomly.

Pair Corralation between KINDER and BCB Bancorp

Assuming the 90 days trading horizon KINDER MORGAN INC is expected to generate 18.14 times more return on investment than BCB Bancorp. However, KINDER is 18.14 times more volatile than BCB Bancorp. It trades about 0.04 of its potential returns per unit of risk. BCB Bancorp is currently generating about -0.01 per unit of risk. If you would invest  9,293  in KINDER MORGAN INC on September 24, 2024 and sell it today you would earn a total of  247.00  from holding KINDER MORGAN INC or generate 2.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.39%
Values	Daily Returns

KINDER MORGAN INC  vs.  BCB Bancorp

KINDER MORGAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KINDER MORGAN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

BCB Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCB Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, BCB Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with KINDER and BCB Bancorp

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

The idea behind KINDER MORGAN INC and BCB Bancorp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.