Correlation Between Kinder Morgan and Navigator Holdings
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and Navigator 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 Kinder Morgan and Navigator Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and Navigator Holdings, you can compare the effects of market volatilities on Kinder Morgan and Navigator 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 Kinder Morgan with a short position of Navigator Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Navigator Holdings.
Diversification Opportunities for Kinder Morgan and Navigator Holdings
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinder and Navigator is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Navigator Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Holdings and Kinder Morgan 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 are associated (or correlated) with Navigator Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Holdings has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and Navigator Holdings go up and down completely randomly.
Pair Corralation between Kinder Morgan and Navigator Holdings
Considering the 90-day investment horizon Kinder Morgan is expected to generate 1.07 times less return on investment than Navigator Holdings. But when comparing it to its historical volatility, Kinder Morgan is 1.59 times less risky than Navigator Holdings. It trades about 0.07 of its potential returns per unit of risk. Navigator Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,138 in Navigator Holdings on June 22, 2024 and sell it today you would earn a total of 452.00 from holding Navigator Holdings or generate 39.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kinder Morgan vs. Navigator Holdings
Performance |
Timeline |
Kinder Morgan |
Navigator Holdings |
Kinder Morgan and Navigator Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kinder Morgan and Navigator Holdings
The main advantage of trading using opposite Kinder Morgan and Navigator Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, Navigator 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 Navigator Holdings will offset losses from the drop in Navigator Holdings' long position.Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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