Correlation Between Kkr Income and Western Asset

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

Diversification Opportunities for Kkr Income and Western Asset

0.12

Correlation Coefficient

Kkr Income  Western Asset

Average diversification

The 3 months correlation between Kkr and Western is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Income Opportunities and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Kkr Income i.e., Kkr Income and Western Asset go up and down completely randomly.

Pair Corralation between Kkr Income and Western Asset

Considering the 90-day investment horizon Kkr Income Opportunities is expected to generate 1.13 times more return on investment than Western Asset. However, Kkr Income is 1.13 times more volatile than Western Asset High. It trades about 0.15 of its potential returns per unit of risk. Western Asset High is currently generating about 0.11 per unit of risk. If you would invest  1,069  in Kkr Income Opportunities on September 14, 2024 and sell it today you would earn a total of  291.00  from holding Kkr Income Opportunities or generate 27.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Kkr Income Opportunities  vs.  Western Asset High

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.

Western Asset High

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset High are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kkr Income and Western Asset

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

The idea behind Kkr Income Opportunities and Western Asset High 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.