Correlation Between United Maritime and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both United Maritime and Kinder Morgan 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 United Maritime and Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Maritime and Kinder Morgan, you can compare the effects of market volatilities on United Maritime and Kinder Morgan 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 United Maritime with a short position of Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Kinder Morgan.
Diversification Opportunities for United Maritime and Kinder Morgan
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Kinder is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan and United Maritime 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 United Maritime are associated (or correlated) with Kinder Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinder Morgan has no effect on the direction of United Maritime i.e., United Maritime and Kinder Morgan go up and down completely randomly.
Pair Corralation between United Maritime and Kinder Morgan
Given the investment horizon of 90 days United Maritime is expected to under-perform the Kinder Morgan. In addition to that, United Maritime is 1.33 times more volatile than Kinder Morgan. It trades about -0.25 of its total potential returns per unit of risk. Kinder Morgan is currently generating about 0.22 per unit of volatility. If you would invest 2,196 in Kinder Morgan on September 24, 2024 and sell it today you would earn a total of 501.00 from holding Kinder Morgan or generate 22.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
United Maritime vs. Kinder Morgan
Performance |
Timeline |
United Maritime |
Kinder Morgan |
United Maritime and Kinder Morgan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Maritime and Kinder Morgan
The main advantage of trading using opposite United Maritime and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Maritime position performs unexpectedly, Kinder Morgan 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 Kinder Morgan will offset losses from the drop in Kinder Morgan's long position.United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
Kinder Morgan vs. United Maritime | Kinder Morgan vs. Globus Maritime | Kinder Morgan vs. Castor Maritime | Kinder Morgan vs. Safe Bulkers |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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