Correlation Between Kkr Credit and Sky Metals
Can any of the company-specific risk be diversified away by investing in both Kkr Credit and Sky 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 Sky 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 Sky Metals, you can compare the effects of market volatilities on Kkr Credit and Sky 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 Sky Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kkr Credit and Sky Metals.
Diversification Opportunities for Kkr Credit and Sky Metals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kkr and Sky is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kkr Credit Income and Sky Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky 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 Sky Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Metals has no effect on the direction of Kkr Credit i.e., Kkr Credit and Sky Metals go up and down completely randomly.
Pair Corralation between Kkr Credit and Sky Metals
Assuming the 90 days trading horizon Kkr Credit is expected to generate 8.53 times less return on investment than Sky Metals. But when comparing it to its historical volatility, Kkr Credit Income is 5.15 times less risky than Sky Metals. It trades about 0.1 of its potential returns per unit of risk. Sky Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4.80 in Sky Metals on September 13, 2024 and sell it today you would earn a total of 0.70 from holding Sky Metals or generate 14.58% 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. Sky Metals
Performance |
| Timeline |
| Kkr Credit Income |
| Sky Metals |
Kkr Credit and Sky Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kkr Credit and Sky Metals
The main advantage of trading using opposite Kkr Credit and Sky Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kkr Credit position performs unexpectedly, Sky 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 Sky Metals will offset losses from the drop in Sky Metals' long position.| Kkr Credit vs. Mayfield Childcare | Kkr Credit vs. Bank of Queensland | Kkr Credit vs. Dexus Convenience Retail | Kkr Credit vs. Pioneer Credit |
| Sky Metals vs. Champion Iron | Sky Metals vs. Australian Strategic Materials | Sky Metals vs. Ras Technology Holdings | Sky Metals vs. Red Hill Iron |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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