Correlation Between Kkr Credit and Hutchison Telecommunicatio

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

Diversification Opportunities for Kkr Credit and Hutchison Telecommunicatio

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Kkr and Hutchison is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Kkr Credit i.e., Kkr Credit and Hutchison Telecommunicatio go up and down completely randomly.

Pair Corralation between Kkr Credit and Hutchison Telecommunicatio

Assuming the 90 days trading horizon Kkr Credit is expected to generate 2.38 times less return on investment than Hutchison Telecommunicatio. But when comparing it to its historical volatility, Kkr Credit Income is 3.07 times less risky than Hutchison Telecommunicatio. It trades about 0.39 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Hutchison Telecommunications on September 28, 2024 and sell it today you would earn a total of  0.30  from holding Hutchison Telecommunications or generate 12.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Kkr Credit Income  vs.  Hutchison Telecommunications

 Performance 
       Timeline  
Kkr Credit Income 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kkr Credit Income are ranked lower than 10 (%) 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.
Hutchison Telecommunicatio 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Hutchison Telecommunications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hutchison Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kkr Credit and Hutchison Telecommunicatio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kkr Credit and Hutchison Telecommunicatio

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

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