Correlation Between Kkr Credit and Iluka Resources

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

Diversification Opportunities for Kkr Credit and Iluka Resources

-0.41

Correlation Coefficient

Kkr Credit  Iluka Resources

Very good diversification

The 3 months correlation between Kkr and Iluka is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and Iluka Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources 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 Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of Kkr Credit i.e., Kkr Credit and Iluka Resources go up and down completely randomly.

Pair Corralation between Kkr Credit and Iluka Resources

Assuming the 90 days trading horizon Kkr Credit Income is expected to generate 0.29 times more return on investment than Iluka Resources. However, Kkr Credit Income is 3.45 times less risky than Iluka Resources. It trades about 0.04 of its potential returns per unit of risk. Iluka Resources is currently generating about -0.05 per unit of risk. If you would invest  230.00  in Kkr Credit Income on October 24, 2024 and sell it today you would earn a total of  4.00  from holding Kkr Credit Income or generate 1.74% return on investment over 90 days.

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

Kkr Credit Income  vs.  Iluka Resources

Kkr Credit Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kkr Credit Income are ranked lower than 3 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Iluka Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iluka Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kkr Credit and Iluka Resources

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

The idea behind Kkr Credit Income and Iluka Resources 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 Managers module to screen money managers from public funds and ETFs managed around the world.