Correlation Between KKR Co and Ashtead Group

Can any of the company-specific risk be diversified away by investing in both KKR Co and Ashtead Group 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 Co and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KKR Co LP and Ashtead Group plc, you can compare the effects of market volatilities on KKR Co and Ashtead Group 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 Co with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Ashtead Group.

Diversification Opportunities for KKR Co and Ashtead Group

0.92

Correlation Coefficient

KKR Co  Ashtead Group

Almost no diversification

The 3 months correlation between KKR and Ashtead is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Ashtead Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Group plc and KKR Co 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 Co LP are associated (or correlated) with Ashtead Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Group plc has no effect on the direction of KKR Co i.e., KKR Co and Ashtead Group go up and down completely randomly.

Pair Corralation between KKR Co and Ashtead Group

Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Ashtead Group. In addition to that, KKR Co is 1.15 times more volatile than Ashtead Group plc. It trades about -0.12 of its total potential returns per unit of risk. Ashtead Group plc is currently generating about -0.04 per unit of volatility. If you would invest  6,155  in Ashtead Group plc on December 27, 2024 and sell it today you would lose (463.00) from holding Ashtead Group plc or give up 7.52% of portfolio value over 90 days.

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

KKR Co LP  vs.  Ashtead Group plc

KKR Co LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days KKR Co LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ashtead Group plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashtead Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ashtead Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KKR Co and Ashtead Group

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

The idea behind KKR Co LP and Ashtead Group plc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.