Correlation Between US Global and KKR Co
Can any of the company-specific risk be diversified away by investing in both US Global and KKR Co 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 US Global and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and KKR Co LP, you can compare the effects of market volatilities on US Global and KKR Co 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 US Global with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and KKR Co.
Diversification Opportunities for US Global and KKR Co
Excellent diversification
The 3 months correlation between GROW and KKR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and US Global 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 US Global Investors are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of US Global i.e., US Global and KKR Co go up and down completely randomly.
Pair Corralation between US Global and KKR Co
Given the investment horizon of 90 days US Global is expected to generate 6.91 times less return on investment than KKR Co. But when comparing it to its historical volatility, US Global Investors is 1.56 times less risky than KKR Co. It trades about 0.06 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 14,057 in KKR Co LP on August 27, 2024 and sell it today you would earn a total of 1,837 from holding KKR Co LP or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. KKR Co LP
Performance |
| Timeline |
| US Global Investors |
| KKR Co LP |
US Global and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and KKR Co
The main advantage of trading using opposite US Global and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, KKR Co 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 Co will offset losses from the drop in KKR Co's long position.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl Capital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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