Correlation Between Associated Capital and KKR Co
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and KKR Co LP, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and KKR Co.
Diversification Opportunities for Associated Capital and KKR Co
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and KKR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and KKR Co go up and down completely randomly.
Pair Corralation between Associated Capital and KKR Co
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 25.04 times less return on investment than KKR Co. But when comparing it to its historical volatility, Associated Capital Group is 2.87 times less risky than KKR Co. It trades about 0.03 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 14,057 in KKR Co LP on August 27, 2024 and sell it today you would earn a total of 1,837 from holding KKR Co LP or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. KKR Co LP
Performance |
| Timeline |
| Associated Capital |
| KKR Co LP |
Associated Capital and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and KKR Co
The main advantage of trading using opposite Associated Capital and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl Capital |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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