Correlation Between DP Cap and FS KKR
Can any of the company-specific risk be diversified away by investing in both DP Cap and FS KKR 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 DP Cap and FS KKR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DP Cap Acquisition and FS KKR Capital, you can compare the effects of market volatilities on DP Cap and FS KKR 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 DP Cap with a short position of FS KKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of DP Cap and FS KKR.
Diversification Opportunities for DP Cap and FS KKR
Poor diversification
The 3 months correlation between DPCS and FSK is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DP Cap Acquisition and FS KKR Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS KKR Capital and DP Cap 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 DP Cap Acquisition are associated (or correlated) with FS KKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS KKR Capital has no effect on the direction of DP Cap i.e., DP Cap and FS KKR go up and down completely randomly.
Pair Corralation between DP Cap and FS KKR
Given the investment horizon of 90 days DP Cap Acquisition is expected to generate 4.55 times more return on investment than FS KKR. However, DP Cap is 4.55 times more volatile than FS KKR Capital. It trades about 0.17 of its potential returns per unit of risk. FS KKR Capital is currently generating about 0.49 per unit of risk. If you would invest 1,148 in DP Cap Acquisition on August 30, 2024 and sell it today you would earn a total of 112.00 from holding DP Cap Acquisition or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
DP Cap Acquisition vs. FS KKR Capital
Performance |
| Timeline |
| DP Cap Acquisition |
| FS KKR Capital |
DP Cap and FS KKR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DP Cap and FS KKR
The main advantage of trading using opposite DP Cap and FS KKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DP Cap position performs unexpectedly, FS KKR 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 FS KKR will offset losses from the drop in FS KKR's long position.| DP Cap vs. A SPAC II | DP Cap vs. Athena Technology Acquisition | DP Cap vs. Hudson Acquisition I | DP Cap vs. Alpha One |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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