Correlation Between PowerUp Acquisition and KKR Co

Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and KKR Co 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 PowerUp Acquisition and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PowerUp Acquisition Corp and KKR Co LP, you can compare the effects of market volatilities on PowerUp Acquisition and KKR Co 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 PowerUp Acquisition with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and KKR Co.

Diversification Opportunities for PowerUp Acquisition and KKR Co

-0.51

Correlation Coefficient

PowerUp Acquisition  KKR Co

Excellent diversification

The 3 months correlation between PowerUp and KKR is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and PowerUp Acquisition 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 PowerUp Acquisition Corp are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and KKR Co go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and KKR Co

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 0.7 times more return on investment than KKR Co. However, PowerUp Acquisition Corp is 1.42 times less risky than KKR Co. It trades about 0.0 of its potential returns per unit of risk. KKR Co LP is currently generating about -0.11 per unit of risk. If you would invest  1,145  in PowerUp Acquisition Corp on September 27, 2024 and sell it today you would lose (1.00) from holding PowerUp Acquisition Corp or give up 0.09% of portfolio value over 90 days.

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

PowerUp Acquisition Corp  vs.  KKR Co LP

PowerUp Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PowerUp Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PowerUp Acquisition is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with PowerUp Acquisition and KKR Co

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

The idea behind PowerUp Acquisition Corp and KKR Co LP 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.