Correlation Between Kkr Credit and National Australia
Can any of the company-specific risk be diversified away by investing in both Kkr Credit and National Australia 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 National Australia 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 National Australia Bank, you can compare the effects of market volatilities on Kkr Credit and National Australia 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 National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kkr Credit and National Australia.
Diversification Opportunities for Kkr Credit and National Australia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kkr and National is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank 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 National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Kkr Credit i.e., Kkr Credit and National Australia go up and down completely randomly.
Pair Corralation between Kkr Credit and National Australia
Assuming the 90 days trading horizon Kkr Credit Income is expected to generate 3.25 times more return on investment than National Australia. However, Kkr Credit is 3.25 times more volatile than National Australia Bank. It trades about 0.04 of its potential returns per unit of risk. National Australia Bank is currently generating about 0.12 per unit of risk. If you would invest 222.00 in Kkr Credit Income on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Kkr Credit Income or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kkr Credit Income vs. National Australia Bank
Performance |
| Timeline |
| Kkr Credit Income |
| National Australia Bank |
Kkr Credit and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kkr Credit and National Australia
The main advantage of trading using opposite Kkr Credit and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kkr Credit position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Kkr Credit vs. Iron Road | Kkr Credit vs. Phoslock Environmental Technologies | Kkr Credit vs. Green Technology Metals | Kkr Credit vs. Legacy Iron Ore |
| National Australia vs. Alto Metals | National Australia vs. Oceania Healthcare | National Australia vs. Singular Health Group | National Australia vs. Austco Healthcare |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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