Correlation Between KKR Co and Golden Star

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

Diversification Opportunities for KKR Co and Golden Star

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between KKR and Golden is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of KKR Co i.e., KKR Co and Golden Star go up and down completely randomly.

Pair Corralation between KKR Co and Golden Star

Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Golden Star. In addition to that, KKR Co is 5.84 times more volatile than Golden Star Acquisition. It trades about -0.08 of its total potential returns per unit of risk. Golden Star Acquisition is currently generating about -0.02 per unit of volatility. If you would invest  1,149  in Golden Star Acquisition on October 10, 2024 and sell it today you would lose (2.00) from holding Golden Star Acquisition or give up 0.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

KKR Co LP  vs.  Golden Star Acquisition

 Performance 
       Timeline  
KKR Co LP 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in KKR Co LP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, KKR Co may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Golden Star Acquisition 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

KKR Co and Golden Star Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KKR Co and Golden Star

The main advantage of trading using opposite KKR Co and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.
The idea behind KKR Co LP and Golden Star Acquisition 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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