Correlation Between Embrace Change and KKR Real
Can any of the company-specific risk be diversified away by investing in both Embrace Change 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 Embrace Change and KKR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embrace Change Acquisition and KKR Real Estate, you can compare the effects of market volatilities on Embrace Change 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 Embrace Change with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and KKR Real.
Diversification Opportunities for Embrace Change and KKR Real
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embrace and KKR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition 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 Embrace Change 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 Embrace Change Acquisition 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 Embrace Change i.e., Embrace Change and KKR Real go up and down completely randomly.
Pair Corralation between Embrace Change and KKR Real
Assuming the 90 days horizon Embrace Change Acquisition is expected to generate 0.08 times more return on investment than KKR Real. However, Embrace Change Acquisition is 12.99 times less risky than KKR Real. It trades about -0.21 of its potential returns per unit of risk. KKR Real Estate is currently generating about -0.06 per unit of risk. If you would invest 1,170 in Embrace Change Acquisition on August 24, 2024 and sell it today you would lose (5.00) from holding Embrace Change Acquisition or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Embrace Change Acquisition vs. KKR Real Estate
Performance |
| Timeline |
| Embrace Change Acqui |
| KKR Real Estate |
Embrace Change and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embrace Change and KKR Real
The main advantage of trading using opposite Embrace Change and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change 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.| Embrace Change vs. PowerUp Acquisition Corp | Embrace Change vs. Aurora Innovation | Embrace Change vs. HUMANA INC | Embrace Change vs. Aquagold International |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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