Correlation Between 26444HAE1 and FS KKR

Can any of the company-specific risk be diversified away by investing in both 26444HAE1 and FS KKR 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 26444HAE1 and FS KKR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY FLA and FS KKR Capital, you can compare the effects of market volatilities on 26444HAE1 and FS KKR 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 26444HAE1 with a short position of FS KKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26444HAE1 and FS KKR.

Diversification Opportunities for 26444HAE1 and FS KKR

-0.49

Correlation Coefficient

26444HAE1  FS KKR

Very good diversification

The 3 months correlation between 26444HAE1 and FSK is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY FLA and FS KKR Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS KKR Capital and 26444HAE1 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 DUKE ENERGY FLA are associated (or correlated) with FS KKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS KKR Capital has no effect on the direction of 26444HAE1 i.e., 26444HAE1 and FS KKR go up and down completely randomly.

Pair Corralation between 26444HAE1 and FS KKR

Assuming the 90 days trading horizon DUKE ENERGY FLA is expected to under-perform the FS KKR. But the bond apears to be less risky and, when comparing its historical volatility, DUKE ENERGY FLA is 1.45 times less risky than FS KKR. The bond trades about -0.08 of its potential returns per unit of risk. The FS KKR Capital is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,953  in FS KKR Capital on October 11, 2024 and sell it today you would earn a total of  185.00  from holding FS KKR Capital or generate 9.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

DUKE ENERGY FLA  vs.  FS KKR Capital

DUKE ENERGY FLA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY FLA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26444HAE1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FS KKR Capital

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, FS KKR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 26444HAE1 and FS KKR

The main advantage of trading using opposite 26444HAE1 and FS KKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26444HAE1 position performs unexpectedly, FS KKR 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 FS KKR will offset losses from the drop in FS KKR's long position.

The idea behind DUKE ENERGY FLA and FS KKR Capital 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.