Correlation Between FS KKR and SBC Communications
Can any of the company-specific risk be diversified away by investing in both FS KKR and SBC Communications 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 FS KKR and SBC Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FS KKR Capital and SBC Communications, you can compare the effects of market volatilities on FS KKR and SBC Communications 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 FS KKR with a short position of SBC Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS KKR and SBC Communications.
Diversification Opportunities for FS KKR and SBC Communications
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSK and SBC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and SBC Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Communications and FS KKR 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 FS KKR Capital are associated (or correlated) with SBC Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Communications has no effect on the direction of FS KKR i.e., FS KKR and SBC Communications go up and down completely randomly.
Pair Corralation between FS KKR and SBC Communications
Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.21 times more return on investment than SBC Communications. However, FS KKR Capital is 4.84 times less risky than SBC Communications. It trades about 0.08 of its potential returns per unit of risk. SBC Communications is currently generating about -0.01 per unit of risk. If you would invest 1,480 in FS KKR Capital on October 25, 2024 and sell it today you would earn a total of 754.00 from holding FS KKR Capital or generate 50.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.04% |
| Values | Daily Returns |
FS KKR Capital vs. SBC Communications
Performance |
| Timeline |
| FS KKR Capital |
| SBC Communications |
FS KKR and SBC Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FS KKR and SBC Communications
The main advantage of trading using opposite FS KKR and SBC Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR position performs unexpectedly, SBC Communications 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 SBC Communications will offset losses from the drop in SBC Communications' long position.| FS KKR vs. BlackRock TCP Capital | FS KKR vs. Triplepoint Venture Growth | FS KKR vs. Sixth Street Specialty | FS KKR vs. Golub Capital BDC |
| SBC Communications vs. Valneva SE ADR | SBC Communications vs. Arrow Electronics | SBC Communications vs. Sellas Life Sciences | SBC Communications vs. Spyre Therapeutics |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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