Correlation Between Vodka Brands and Kinetik Holdings

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

By analyzing existing cross correlation between Vodka Brands Corp and Kinetik Holdings, you can compare the effects of market volatilities on Vodka Brands and Kinetik Holdings 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 Vodka Brands with a short position of Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Kinetik Holdings.

Diversification Opportunities for Vodka Brands and Kinetik Holdings

0.44

Correlation Coefficient

Vodka Brands  Kinetik Holdings

Very weak diversification

The 3 months correlation between Vodka and Kinetik is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings and Vodka Brands 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 Vodka Brands Corp are associated (or correlated) with Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Vodka Brands i.e., Vodka Brands and Kinetik Holdings go up and down completely randomly.

Pair Corralation between Vodka Brands and Kinetik Holdings

Given the investment horizon of 90 days Vodka Brands is expected to generate 4.46 times less return on investment than Kinetik Holdings. In addition to that, Vodka Brands is 1.71 times more volatile than Kinetik Holdings. It trades about 0.03 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.2 per unit of volatility. If you would invest  4,420  in Kinetik Holdings on September 27, 2024 and sell it today you would earn a total of  1,264  from holding Kinetik Holdings or generate 28.6% return on investment over 90 days.

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

Vodka Brands Corp  vs.  Kinetik Holdings

Vodka Brands Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Vodka Brands is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Vodka Brands and Kinetik Holdings

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

The idea behind Vodka Brands Corp and Kinetik Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.