Correlation Between Ares Commercial and KKR Real
Can any of the company-specific risk be diversified away by investing in both Ares Commercial and KKR Real 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 Ares Commercial and KKR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Commercial Real and KKR Real Estate, you can compare the effects of market volatilities on Ares Commercial and KKR Real 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 Ares Commercial with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Commercial and KKR Real.
Diversification Opportunities for Ares Commercial and KKR Real
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and KKR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ares Commercial Real and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Real Estate and Ares Commercial 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 Ares Commercial Real are associated (or correlated) with KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of Ares Commercial i.e., Ares Commercial and KKR Real go up and down completely randomly.
Pair Corralation between Ares Commercial and KKR Real
Given the investment horizon of 90 days Ares Commercial is expected to generate 1.43 times less return on investment than KKR Real. In addition to that, Ares Commercial is 1.11 times more volatile than KKR Real Estate. It trades about 0.07 of its total potential returns per unit of risk. KKR Real Estate is currently generating about 0.11 per unit of volatility. If you would invest 899.00 in KKR Real Estate on August 24, 2024 and sell it today you would earn a total of 259.00 from holding KKR Real Estate or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ares Commercial Real vs. KKR Real Estate
Performance |
| Timeline |
| Ares Commercial Real |
| KKR Real Estate |
Ares Commercial and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Commercial and KKR Real
The main advantage of trading using opposite Ares Commercial and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Commercial position performs unexpectedly, KKR Real 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 Real will offset losses from the drop in KKR Real's long position.| Ares Commercial vs. Two Harbors Investments | Ares Commercial vs. Apollo Commercial Real | Ares Commercial vs. Ellington Financial | Ares Commercial vs. Dynex Capital |
| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |