Correlation Between Icahn Enterprises and World Kinect

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

By analyzing existing cross correlation between Icahn Enterprises LP and World Kinect, you can compare the effects of market volatilities on Icahn Enterprises and World Kinect 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 Icahn Enterprises with a short position of World Kinect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and World Kinect.

Diversification Opportunities for Icahn Enterprises and World Kinect

0.77

Correlation Coefficient

Icahn Enterprises  World Kinect

Poor diversification

The 3 months correlation between Icahn and World is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and World Kinect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Kinect and Icahn Enterprises 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 Icahn Enterprises LP are associated (or correlated) with World Kinect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Kinect has no effect on the direction of Icahn Enterprises i.e., Icahn Enterprises and World Kinect go up and down completely randomly.

Pair Corralation between Icahn Enterprises and World Kinect

Considering the 90-day investment horizon Icahn Enterprises is expected to generate 13.53 times less return on investment than World Kinect. In addition to that, Icahn Enterprises is 2.51 times more volatile than World Kinect. It trades about 0.02 of its total potential returns per unit of risk. World Kinect is currently generating about 0.68 per unit of volatility. If you would invest  2,317  in World Kinect on February 19, 2025 and sell it today you would earn a total of  459.00  from holding World Kinect or generate 19.81% return on investment over 90 days.

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

Icahn Enterprises LP  vs.  World Kinect

Icahn Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icahn Enterprises LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

World Kinect

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in World Kinect are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, World Kinect is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Icahn Enterprises and World Kinect

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

The idea behind Icahn Enterprises LP and World Kinect 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.