Correlation Between Apple and KKR Co
Can any of the company-specific risk be diversified away by investing in both Apple and KKR Co 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 Apple and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and KKR Co LP, you can compare the effects of market volatilities on Apple and KKR Co 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 Apple with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and KKR Co.
Diversification Opportunities for Apple and KKR Co
Poor diversification
The 3 months correlation between Apple and KKR is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and Apple 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 Apple Inc are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of Apple i.e., Apple and KKR Co go up and down completely randomly.
Pair Corralation between Apple and KKR Co
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.79 times more return on investment than KKR Co. However, Apple Inc is 1.27 times less risky than KKR Co. It trades about -0.13 of its potential returns per unit of risk. KKR Co LP is currently generating about -0.14 per unit of risk. If you would invest 24,220 in Apple Inc on December 28, 2024 and sell it today you would lose (4,015) from holding Apple Inc or give up 16.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc vs. KKR Co LP
Performance |
Timeline |
Apple Inc |
KKR Co LP |
Apple and KKR Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and KKR Co
The main advantage of trading using opposite Apple and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, KKR Co 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 Co will offset losses from the drop in KKR Co's long position.Apple vs. PennyMac Mortgage Investment | Apple vs. Solstad Offshore ASA | Apple vs. Genco Shipping Trading | Apple vs. Yunnan Water Investment |
KKR Co vs. MOVIE GAMES SA | KKR Co vs. Planet Fitness | KKR Co vs. Khiron Life Sciences | KKR Co vs. GEAR4MUSIC LS 10 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |