Correlation Between KKR Co and SP Global
Can any of the company-specific risk be diversified away by investing in both KKR Co and SP Global 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 SP Global 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 SP Global, you can compare the effects of market volatilities on KKR Co and SP Global 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 SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and SP Global.
Diversification Opportunities for KKR Co and SP Global
Poor diversification
The 3 months correlation between KKR and MHL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of KKR Co i.e., KKR Co and SP Global go up and down completely randomly.
Pair Corralation between KKR Co and SP Global
Assuming the 90 days trading horizon KKR Co LP is expected to under-perform the SP Global. In addition to that, KKR Co is 1.51 times more volatile than SP Global. It trades about -0.19 of its total potential returns per unit of risk. SP Global is currently generating about -0.24 per unit of volatility. If you would invest 48,999 in SP Global on September 24, 2024 and sell it today you would lose (2,504) from holding SP Global or give up 5.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
KKR Co LP vs. SP Global
Performance |
Timeline |
KKR Co LP |
SP Global |
KKR Co and SP Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KKR Co and SP Global
The main advantage of trading using opposite KKR Co and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global's long position.KKR Co vs. Morgan Stanley | KKR Co vs. Morgan Stanley | KKR Co vs. The Charles Schwab | KKR Co vs. The Goldman Sachs |
SP Global vs. Morgan Stanley | SP Global vs. Morgan Stanley | SP Global vs. The Charles Schwab | SP Global vs. The Goldman Sachs |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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