Correlation Between Franklin Resources and KKR Co
Can any of the company-specific risk be diversified away by investing in both Franklin Resources 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 Franklin Resources and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and KKR Co LP, you can compare the effects of market volatilities on Franklin Resources 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 Franklin Resources with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and KKR Co.
Diversification Opportunities for Franklin Resources and KKR Co
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and KKR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources 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 Franklin Resources 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 Franklin Resources 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 Franklin Resources i.e., Franklin Resources and KKR Co go up and down completely randomly.
Pair Corralation between Franklin Resources and KKR Co
Considering the 90-day investment horizon Franklin Resources is expected to under-perform the KKR Co. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Resources is 1.09 times less risky than KKR Co. The stock trades about -0.02 of its potential returns per unit of risk. The KKR Co LP is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,759 in KKR Co LP on November 5, 2024 and sell it today you would earn a total of 10,948 from holding KKR Co LP or generate 190.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Resources vs. KKR Co LP
Performance |
| Timeline |
| Franklin Resources |
| KKR Co LP |
Franklin Resources and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and KKR Co
The main advantage of trading using opposite Franklin Resources and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources 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.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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