Correlation Between AgJunction and KKR Real

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

By analyzing existing cross correlation between AgJunction and KKR Real Estate, you can compare the effects of market volatilities on AgJunction and KKR Real 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 AgJunction with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgJunction and KKR Real.

Diversification Opportunities for AgJunction and KKR Real

0.42

Correlation Coefficient

AgJunction  KKR Real

Very weak diversification

The 3 months correlation between AgJunction and KKR is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AgJunction and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Real Estate and AgJunction 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 AgJunction are associated (or correlated) with KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of AgJunction i.e., AgJunction and KKR Real go up and down completely randomly.

Pair Corralation between AgJunction and KKR Real

Considering the 90-day investment horizon AgJunction is expected to generate 110.0 times more return on investment than KKR Real. However, AgJunction is 110.0 times more volatile than KKR Real Estate. It trades about 0.12 of its potential returns per unit of risk. KKR Real Estate is currently generating about -0.08 per unit of risk. If you would invest  357.00  in AgJunction on September 14, 2024 and sell it today you would lose (57.00) from holding AgJunction or give up 15.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

AgJunction  vs.  KKR Real Estate

AgJunction

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days AgJunction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady forward-looking indicators, AgJunction showed solid returns over the last few months and may actually be approaching a breakup point.

KKR Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KKR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, KKR Real is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AgJunction and KKR Real

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

The idea behind AgJunction and KKR Real Estate 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.