Correlation Between FS KKR and Sun Hung
Can any of the company-specific risk be diversified away by investing in both FS KKR and Sun Hung 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 Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on FS KKR and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS KKR and Sun Hung.
Diversification Opportunities for FS KKR and Sun Hung
Pay attention - limited upside
The 3 months correlation between FSK and Sun is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of FS KKR i.e., FS KKR and Sun Hung go up and down completely randomly.
Pair Corralation between FS KKR and Sun Hung
Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.7 times more return on investment than Sun Hung. However, FS KKR Capital is 1.44 times less risky than Sun Hung. It trades about 0.09 of its potential returns per unit of risk. Sun Hung Kai is currently generating about -0.04 per unit of risk. If you would invest 1,461 in FS KKR Capital on November 2, 2024 and sell it today you would earn a total of 850.00 from holding FS KKR Capital or generate 58.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FS KKR Capital vs. Sun Hung Kai
Performance |
| Timeline |
| FS KKR Capital |
| Sun Hung Kai |
FS KKR and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FS KKR and Sun Hung
The main advantage of trading using opposite FS KKR and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's 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 |
| Sun Hung vs. Hong Kong Land | Sun Hung vs. Wharf Holdings | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Bayport International Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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