Correlation Between Kkr Credit and Cyclone Metals

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

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

Diversification Opportunities for Kkr Credit and Cyclone Metals

0.23

Correlation Coefficient

Kkr Credit  Cyclone Metals

Modest diversification

The 3 months correlation between Kkr and Cyclone is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and Cyclone Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclone Metals and Kkr Credit 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 Credit Income are associated (or correlated) with Cyclone Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclone Metals has no effect on the direction of Kkr Credit i.e., Kkr Credit and Cyclone Metals go up and down completely randomly.

Pair Corralation between Kkr Credit and Cyclone Metals

Assuming the 90 days trading horizon Kkr Credit is expected to generate 26.34 times less return on investment than Cyclone Metals. But when comparing it to its historical volatility, Kkr Credit Income is 22.08 times less risky than Cyclone Metals. It trades about 0.08 of its potential returns per unit of risk. Cyclone Metals Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Cyclone Metals Limited on September 20, 2024 and sell it today you would earn a total of  1.20  from holding Cyclone Metals Limited or generate 40.0% return on investment over 90 days.

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

Kkr Credit Income  vs.  Cyclone Metals Limited

Kkr Credit Income

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kkr Credit Income are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Kkr Credit is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cyclone Metals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cyclone Metals Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Cyclone Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kkr Credit and Cyclone Metals

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

The idea behind Kkr Credit Income and Cyclone Metals Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.