Correlation Between KKR Co and Astra International

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

Diversification Opportunities for KKR Co and Astra International

-0.6

Correlation Coefficient

KKR Co  Astra International

Excellent diversification

The 3 months correlation between KKR and Astra is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of KKR Co i.e., KKR Co and Astra International go up and down completely randomly.

Pair Corralation between KKR Co and Astra International

Considering the 90-day investment horizon KKR Co LP is expected to generate 1.06 times more return on investment than Astra International. However, KKR Co is 1.06 times more volatile than Astra International Tbk. It trades about -0.11 of its potential returns per unit of risk. Astra International Tbk is currently generating about -0.18 per unit of risk. If you would invest  15,894  in KKR Co LP on September 25, 2024 and sell it today you would lose (813.00) from holding KKR Co LP or give up 5.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

KKR Co LP  vs.  Astra International Tbk

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 inconsistent forward-looking signals, KKR Co reported solid returns over the last few months and may actually be approaching a breakup point.

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with KKR Co and Astra International

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

The idea behind KKR Co LP and Astra International Tbk 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.