Correlation Between FS KKR and Neogen

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

Diversification Opportunities for FS KKR and Neogen

-0.71

Correlation Coefficient

FS KKR  Neogen

Pay attention - limited upside

The 3 months correlation between FSK and Neogen is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of FS KKR i.e., FS KKR and Neogen go up and down completely randomly.

Pair Corralation between FS KKR and Neogen

Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.32 times more return on investment than Neogen. However, FS KKR Capital is 3.08 times less risky than Neogen. It trades about 0.16 of its potential returns per unit of risk. Neogen is currently generating about -0.09 per unit of risk. If you would invest  1,890  in FS KKR Capital on October 26, 2024 and sell it today you would earn a total of  362.00  from holding FS KKR Capital or generate 19.15% return on investment over 90 days.

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

FS KKR Capital  vs.  Neogen

FS KKR Capital

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 19 (%) 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.

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FS KKR and Neogen

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

The idea behind FS KKR Capital and Neogen 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.