Correlation Between Dexus Convenience and Kkr Credit

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

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

Diversification Opportunities for Dexus Convenience and Kkr Credit

0.33

Correlation Coefficient

Dexus Convenience  Kkr Credit

Weak diversification

The 3 months correlation between Dexus and Kkr is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail 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 Dexus Convenience 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 Dexus Convenience Retail 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 Dexus Convenience i.e., Dexus Convenience and Kkr Credit go up and down completely randomly.

Pair Corralation between Dexus Convenience and Kkr Credit

Assuming the 90 days trading horizon Dexus Convenience Retail is expected to under-perform the Kkr Credit. In addition to that, Dexus Convenience is 2.41 times more volatile than Kkr Credit Income. It trades about -0.05 of its total potential returns per unit of risk. Kkr Credit Income is currently generating about -0.02 per unit of volatility. If you would invest  232.00  in Kkr Credit Income on December 21, 2024 and sell it today you would lose (2.00) from holding Kkr Credit Income or give up 0.86% of portfolio value over 90 days.

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

Dexus Convenience Retail  vs.  Kkr Credit Income

Dexus Convenience Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dexus Convenience Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Dexus Convenience 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

Weak

Over the last 90 days Kkr Credit Income has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Dexus Convenience and Kkr Credit

The main advantage of trading using opposite Dexus Convenience and Kkr Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience 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 Dexus Convenience Retail 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.