Correlation Between KKR Co and Cartesian Growth

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

Diversification Opportunities for KKR Co and Cartesian Growth

-0.37

Correlation Coefficient

KKR Co  Cartesian Growth

Very good diversification

The 3 months correlation between KKR and Cartesian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of KKR Co i.e., KKR Co and Cartesian Growth go up and down completely randomly.

Pair Corralation between KKR Co and Cartesian Growth

Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Cartesian Growth. In addition to that, KKR Co is 27.19 times more volatile than Cartesian Growth. It trades about -0.12 of its total potential returns per unit of risk. Cartesian Growth is currently generating about 0.08 per unit of volatility. If you would invest  1,163  in Cartesian Growth on December 19, 2024 and sell it today you would earn a total of  6.00  from holding Cartesian Growth or generate 0.52% return on investment over 90 days.

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

KKR Co LP  vs.  Cartesian Growth

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.

Cartesian Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cartesian Growth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Cartesian Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KKR Co and Cartesian Growth

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

The idea behind KKR Co LP and Cartesian Growth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.