Correlation Between Apollo Commercial and KKR Real
Can any of the company-specific risk be diversified away by investing in both Apollo 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 Apollo 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 Apollo Commercial Real and KKR Real Estate, you can compare the effects of market volatilities on Apollo 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 Apollo Commercial with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and KKR Real.
Diversification Opportunities for Apollo Commercial and KKR Real
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apollo and KKR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apollo 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 Apollo 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 Apollo 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 Apollo Commercial i.e., Apollo Commercial and KKR Real go up and down completely randomly.
Pair Corralation between Apollo Commercial and KKR Real
Considering the 90-day investment horizon Apollo Commercial Real is expected to generate 0.87 times more return on investment than KKR Real. However, Apollo Commercial Real is 1.15 times less risky than KKR Real. It trades about 0.01 of its potential returns per unit of risk. KKR Real Estate is currently generating about -0.16 per unit of risk. If you would invest 885.00 in Apollo Commercial Real on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Apollo Commercial Real or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Commercial Real vs. KKR Real Estate
Performance |
| Timeline |
| Apollo Commercial Real |
| KKR Real Estate |
Apollo Commercial and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and KKR Real
The main advantage of trading using opposite Apollo Commercial and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo 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.| Apollo Commercial vs. Ares Commercial Real | Apollo Commercial vs. PennyMac Mortgage Investment | Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Starwood Property Trust |
| 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.
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