Correlation Between Kkr Credit and Alto Metals
Can any of the company-specific risk be diversified away by investing in both Kkr Credit and Alto Metals 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 Kkr Credit and Alto Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kkr Credit Income and Alto Metals, you can compare the effects of market volatilities on Kkr Credit and Alto Metals 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 Kkr Credit with a short position of Alto Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kkr Credit and Alto Metals.
Diversification Opportunities for Kkr Credit and Alto Metals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kkr and Alto is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and Alto Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Metals and Kkr Credit 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 Kkr Credit Income are associated (or correlated) with Alto Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Metals has no effect on the direction of Kkr Credit i.e., Kkr Credit and Alto Metals go up and down completely randomly.
Pair Corralation between Kkr Credit and Alto Metals
Assuming the 90 days trading horizon Kkr Credit is expected to generate 2.38 times less return on investment than Alto Metals. But when comparing it to its historical volatility, Kkr Credit Income is 6.36 times less risky than Alto Metals. It trades about 0.11 of its potential returns per unit of risk. Alto Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.50 in Alto Metals on August 31, 2024 and sell it today you would earn a total of 2.70 from holding Alto Metals or generate 41.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Kkr Credit Income vs. Alto Metals
Performance |
| Timeline |
| Kkr Credit Income |
| Alto Metals |
Kkr Credit and Alto Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kkr Credit and Alto Metals
The main advantage of trading using opposite Kkr Credit and Alto Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kkr Credit position performs unexpectedly, Alto Metals 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 Alto Metals will offset losses from the drop in Alto Metals' long position.| Kkr Credit vs. Westpac Banking | Kkr Credit vs. Odyssey Energy | Kkr Credit vs. Ecofibre | Kkr Credit vs. iShares Global Healthcare |
| Alto Metals vs. Northern Star Resources | Alto Metals vs. Evolution Mining | Alto Metals vs. Bluescope Steel | Alto Metals vs. De Grey Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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