Correlation Between KKR Co and APx Acquisition
Can any of the company-specific risk be diversified away by investing in both KKR Co and APx Acquisition 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 Co and APx Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KKR Co LP and APx Acquisition I, you can compare the effects of market volatilities on KKR Co and APx Acquisition 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 Co with a short position of APx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and APx Acquisition.
Diversification Opportunities for KKR Co and APx Acquisition
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KKR and APx is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and APx Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APx Acquisition I and KKR Co 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 Co LP are associated (or correlated) with APx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APx Acquisition I has no effect on the direction of KKR Co i.e., KKR Co and APx Acquisition go up and down completely randomly.
Pair Corralation between KKR Co and APx Acquisition
Considering the 90-day investment horizon KKR Co LP is expected to generate 11.65 times more return on investment than APx Acquisition. However, KKR Co is 11.65 times more volatile than APx Acquisition I. It trades about 0.13 of its potential returns per unit of risk. APx Acquisition I is currently generating about 0.19 per unit of risk. If you would invest 4,665 in KKR Co LP on September 5, 2024 and sell it today you would earn a total of 11,125 from holding KKR Co LP or generate 238.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. APx Acquisition I
Performance |
| Timeline |
| KKR Co LP |
| APx Acquisition I |
KKR Co and APx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and APx Acquisition
The main advantage of trading using opposite KKR Co and APx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, APx Acquisition 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 APx Acquisition will offset losses from the drop in APx Acquisition's long position.| KKR Co vs. Visa Class A | KKR Co vs. Diamond Hill Investment | KKR Co vs. Associated Capital Group | KKR Co vs. Deutsche Bank AG |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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