Correlation Between Franklin BSP and KKR Real
Can any of the company-specific risk be diversified away by investing in both Franklin BSP 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 Franklin BSP and KKR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin BSP Realty and KKR Real Estate, you can compare the effects of market volatilities on Franklin BSP 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 Franklin BSP with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin BSP and KKR Real.
Diversification Opportunities for Franklin BSP and KKR Real
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and KKR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin BSP Realty 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 Franklin BSP 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 BSP Realty 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 Franklin BSP i.e., Franklin BSP and KKR Real go up and down completely randomly.
Pair Corralation between Franklin BSP and KKR Real
Given the investment horizon of 90 days Franklin BSP Realty is expected to generate 0.75 times more return on investment than KKR Real. However, Franklin BSP Realty is 1.33 times less risky than KKR Real. It trades about 0.04 of its potential returns per unit of risk. KKR Real Estate is currently generating about 0.02 per unit of risk. If you would invest 1,152 in Franklin BSP Realty on August 24, 2024 and sell it today you would earn a total of 148.00 from holding Franklin BSP Realty or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin BSP Realty vs. KKR Real Estate
Performance |
| Timeline |
| Franklin BSP Realty |
| KKR Real Estate |
Franklin BSP and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin BSP and KKR Real
The main advantage of trading using opposite Franklin BSP and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin BSP 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.| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Nexpoint Real Estate | Franklin BSP vs. Great Ajax Corp | Franklin BSP vs. Ladder Capital Corp |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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