Correlation Between Binah Capital and KKR Co

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Can any of the company-specific risk be diversified away by investing in both Binah Capital 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 Binah Capital and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binah Capital Group, and KKR Co LP, you can compare the effects of market volatilities on Binah Capital 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 Binah Capital with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binah Capital and KKR Co.

Diversification Opportunities for Binah Capital and KKR Co

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Binah and KKR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Binah Capital Group, 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 Binah Capital 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 Binah Capital Group, 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 Binah Capital i.e., Binah Capital and KKR Co go up and down completely randomly.

Pair Corralation between Binah Capital and KKR Co

Considering the 90-day investment horizon Binah Capital Group, is expected to generate 7.02 times more return on investment than KKR Co. However, Binah Capital is 7.02 times more volatile than KKR Co LP. It trades about -0.01 of its potential returns per unit of risk. KKR Co LP is currently generating about -0.08 per unit of risk. If you would invest  313.00  in Binah Capital Group, on October 10, 2024 and sell it today you would lose (56.00) from holding Binah Capital Group, or give up 17.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Binah Capital Group,  vs.  KKR Co LP

 Performance 
       Timeline  
Binah Capital Group, 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Binah Capital reported solid returns over the last few months and may actually be approaching a breakup point.
KKR Co LP 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in KKR Co LP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, KKR Co may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Binah Capital and KKR Co Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Binah Capital and KKR Co

The main advantage of trading using opposite Binah Capital and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binah Capital 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.
The idea behind Binah Capital Group, and KKR Co LP 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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