Correlation Between Kkr Income and Eagle Point

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

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

Diversification Opportunities for Kkr Income and Eagle Point

-0.57

Correlation Coefficient

Kkr Income  Eagle Point

Excellent diversification

The 3 months correlation between Kkr and Eagle is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Income Opportunities and Eagle Point Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Income and Kkr Income 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 Kkr Income Opportunities are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Income has no effect on the direction of Kkr Income i.e., Kkr Income and Eagle Point go up and down completely randomly.

Pair Corralation between Kkr Income and Eagle Point

Considering the 90-day investment horizon Kkr Income Opportunities is expected to generate 2.13 times more return on investment than Eagle Point. However, Kkr Income is 2.13 times more volatile than Eagle Point Income. It trades about 0.09 of its potential returns per unit of risk. Eagle Point Income is currently generating about 0.13 per unit of risk. If you would invest  1,212  in Kkr Income Opportunities on October 14, 2024 and sell it today you would earn a total of  136.00  from holding Kkr Income Opportunities or generate 11.22% return on investment over 90 days.

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

Kkr Income Opportunities  vs.  Eagle Point Income

Kkr Income Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kkr Income Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy forward indicators, Kkr Income is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Eagle Point Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Income are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kkr Income and Eagle Point

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

The idea behind Kkr Income Opportunities and Eagle Point 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.