Correlation Between KKR Co and Gemina Laboratories

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

Diversification Opportunities for KKR Co and Gemina Laboratories

0.77

Correlation Coefficient

KKR Co  Gemina Laboratories

Poor diversification

The 3 months correlation between KKR and Gemina is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories 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 Gemina Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemina Laboratories has no effect on the direction of KKR Co i.e., KKR Co and Gemina Laboratories go up and down completely randomly.

Pair Corralation between KKR Co and Gemina Laboratories

Considering the 90-day investment horizon KKR Co is expected to generate 1.14 times less return on investment than Gemina Laboratories. But when comparing it to its historical volatility, KKR Co LP is 3.56 times less risky than Gemina Laboratories. It trades about 0.16 of its potential returns per unit of risk. Gemina Laboratories is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Gemina Laboratories on September 27, 2024 and sell it today you would earn a total of  6.00  from holding Gemina Laboratories or generate 15.0% return on investment over 90 days.

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

KKR Co LP  vs.  Gemina Laboratories

KKR Co LP

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KKR Co LP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, KKR Co reported solid returns over the last few months and may actually be approaching a breakup point.

Gemina Laboratories

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KKR Co and Gemina Laboratories

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

The idea behind KKR Co LP and Gemina Laboratories 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.