Correlation Between RELIANCE STEEL and KKR Co

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

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

Diversification Opportunities for RELIANCE STEEL and KKR Co

0.0

Correlation Coefficient

RELIANCE STEEL  KKR Co

Pay attention - limited upside

The 3 months correlation between RELIANCE and KKR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RELIANCE STEEL AL 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 RELIANCE STEEL 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 RELIANCE STEEL AL 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 RELIANCE STEEL i.e., RELIANCE STEEL and KKR Co go up and down completely randomly.

Pair Corralation between RELIANCE STEEL and KKR Co

If you would invest  0.00  in RELIANCE STEEL AL on December 21, 2024 and sell it today you would earn a total of  0.00  from holding RELIANCE STEEL AL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

RELIANCE STEEL AL  vs.  KKR Co LP

RELIANCE STEEL AL

Risk-Adjusted Performance

Very Weak

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

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. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with RELIANCE STEEL and KKR Co

The main advantage of trading using opposite RELIANCE STEEL and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RELIANCE STEEL 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 RELIANCE STEEL AL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.