Correlation Between Beneficient Warrant and KKR Co
Can any of the company-specific risk be diversified away by investing in both Beneficient Warrant 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 Beneficient Warrant and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beneficient Warrant and KKR Co LP, you can compare the effects of market volatilities on Beneficient Warrant 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 Beneficient Warrant with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beneficient Warrant and KKR Co.
Diversification Opportunities for Beneficient Warrant and KKR Co
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beneficient and KKR is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Beneficient Warrant 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 Beneficient Warrant 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 Beneficient Warrant 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 Beneficient Warrant i.e., Beneficient Warrant and KKR Co go up and down completely randomly.
Pair Corralation between Beneficient Warrant and KKR Co
Assuming the 90 days horizon Beneficient Warrant is expected to generate 8.53 times more return on investment than KKR Co. However, Beneficient Warrant is 8.53 times more volatile than KKR Co LP. It trades about 0.05 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.12 per unit of risk. If you would invest 8.00 in Beneficient Warrant on October 25, 2024 and sell it today you would lose (7.12) from holding Beneficient Warrant or give up 89.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.83% |
| Values | Daily Returns |
Beneficient Warrant vs. KKR Co LP
Performance |
| Timeline |
| Beneficient Warrant |
| KKR Co LP |
Beneficient Warrant and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beneficient Warrant and KKR Co
The main advantage of trading using opposite Beneficient Warrant and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beneficient Warrant 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.| Beneficient Warrant vs. Invesco Plc | Beneficient Warrant vs. Franklin Resources | Beneficient Warrant vs. T Rowe Price | Beneficient Warrant vs. State Street Corp |
| KKR Co vs. MFS Investment Grade | KKR Co vs. Eaton Vance National | KKR Co vs. Nuveen California Select | KKR Co vs. Federated Premier Municipal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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