Correlation Between FS KKR and Western Acquisition

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

Diversification Opportunities for FS KKR and Western Acquisition

0.0

Correlation Coefficient

FS KKR  Western Acquisition

Pay attention - limited upside

The 3 months correlation between FSK and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of FS KKR i.e., FS KKR and Western Acquisition go up and down completely randomly.

Pair Corralation between FS KKR and Western Acquisition

If you would invest  2,097  in FS KKR Capital on December 18, 2024 and sell it today you would earn a total of  32.00  from holding FS KKR Capital or generate 1.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FS KKR Capital  vs.  Western Acquisition Ventures

FS KKR Capital

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, FS KKR is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Western Acquisition

Risk-Adjusted Performance

Very Weak

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

Pair Trading with FS KKR and Western Acquisition

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

The idea behind FS KKR Capital and Western Acquisition Ventures 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.