Correlation Between Carlyle and KKR Co
Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and KKR Co LP, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and KKR Co.
Diversification Opportunities for Carlyle and KKR Co
Almost no diversification
The 3 months correlation between Carlyle and KKR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle 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 Carlyle 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 Carlyle 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 Carlyle i.e., Carlyle and KKR Co go up and down completely randomly.
Pair Corralation between Carlyle and KKR Co
Allowing for the 90-day total investment horizon Carlyle is expected to generate 1.47 times less return on investment than KKR Co. In addition to that, Carlyle is 1.13 times more volatile than KKR Co LP. It trades about 0.1 of its total potential returns per unit of risk. KKR Co LP is currently generating about 0.16 per unit of volatility. If you would invest 7,537 in KKR Co LP on August 26, 2024 and sell it today you would earn a total of 8,326 from holding KKR Co LP or generate 110.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. KKR Co LP
Performance |
| Timeline |
| Carlyle Group |
| KKR Co LP |
Carlyle and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and KKR Co
The main advantage of trading using opposite Carlyle and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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.| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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