Correlation Between FS KKR and Integral

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

Diversification Opportunities for FS KKR and Integral

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between FSK and Integral is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science and FS KKR 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 FS KKR Capital are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of FS KKR i.e., FS KKR and Integral go up and down completely randomly.

Pair Corralation between FS KKR and Integral

Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.36 times more return on investment than Integral. However, FS KKR Capital is 2.78 times less risky than Integral. It trades about -0.02 of its potential returns per unit of risk. Integral Ad Science is currently generating about -0.15 per unit of risk. If you would invest  2,145  in FS KKR Capital on October 11, 2024 and sell it today you would lose (7.00) from holding FS KKR Capital or give up 0.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

FS KKR Capital  vs.  Integral Ad Science

 Performance 
       Timeline  
FS KKR Capital 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, FS KKR may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Integral Ad Science 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FS KKR and Integral Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FS KKR and Integral

The main advantage of trading using opposite FS KKR and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.
The idea behind FS KKR Capital and Integral Ad Science 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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