Correlation Between BSP Financial and Kkr Credit

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

By analyzing existing cross correlation between BSP Financial Group and Kkr Credit Income, you can compare the effects of market volatilities on BSP Financial and Kkr Credit 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 BSP Financial with a short position of Kkr Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Kkr Credit.

Diversification Opportunities for BSP Financial and Kkr Credit

0.31

Correlation Coefficient

BSP Financial  Kkr Credit

Weak diversification

The 3 months correlation between BSP and Kkr is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Kkr Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kkr Credit Income and BSP Financial 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 BSP Financial Group are associated (or correlated) with Kkr Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kkr Credit Income has no effect on the direction of BSP Financial i.e., BSP Financial and Kkr Credit go up and down completely randomly.

Pair Corralation between BSP Financial and Kkr Credit

Assuming the 90 days trading horizon BSP Financial is expected to generate 1.27 times less return on investment than Kkr Credit. In addition to that, BSP Financial is 2.33 times more volatile than Kkr Credit Income. It trades about 0.02 of its total potential returns per unit of risk. Kkr Credit Income is currently generating about 0.05 per unit of volatility. If you would invest  226.00  in Kkr Credit Income on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Kkr Credit Income or generate 2.21% return on investment over 90 days.

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

BSP Financial Group  vs.  Kkr Credit Income

BSP Financial Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BSP Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, BSP Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Kkr Credit Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kkr Credit Income are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Kkr Credit is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BSP Financial and Kkr Credit

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

The idea behind BSP Financial Group and Kkr Credit Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.