Correlation Between FS KKR and Marimaca Copper

Can any of the company-specific risk be diversified away by investing in both FS KKR and Marimaca Copper 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 Marimaca Copper 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 Marimaca Copper Corp, you can compare the effects of market volatilities on FS KKR and Marimaca Copper 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 Marimaca Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS KKR and Marimaca Copper.

Diversification Opportunities for FS KKR and Marimaca Copper

0.66

Correlation Coefficient

FS KKR  Marimaca Copper

Poor diversification

The 3 months correlation between FSK and Marimaca is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp 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 Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of FS KKR i.e., FS KKR and Marimaca Copper go up and down completely randomly.

Pair Corralation between FS KKR and Marimaca Copper

Considering the 90-day investment horizon FS KKR Capital is expected to under-perform the Marimaca Copper. But the stock apears to be less risky and, when comparing its historical volatility, FS KKR Capital is 5.17 times less risky than Marimaca Copper. The stock trades about -0.02 of its potential returns per unit of risk. The Marimaca Copper Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  344.00  in Marimaca Copper Corp on October 11, 2024 and sell it today you would earn a total of  11.00  from holding Marimaca Copper Corp or generate 3.2% return on investment over 90 days.

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

FS KKR Capital  vs.  Marimaca Copper Corp

FS KKR Capital

Risk-Adjusted Performance

14 of 100

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.

Marimaca Copper Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Marimaca Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FS KKR and Marimaca Copper

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

The idea behind FS KKR Capital and Marimaca Copper Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.