Correlation Between KKR Co and Brookfield Corp
Can any of the company-specific risk be diversified away by investing in both KKR Co and Brookfield Corp 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 Brookfield Corp 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 Brookfield Corp, you can compare the effects of market volatilities on KKR Co and Brookfield Corp 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 Brookfield Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Brookfield Corp.
Diversification Opportunities for KKR Co and Brookfield Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KKR and Brookfield is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Brookfield Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Corp 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 Brookfield Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Corp has no effect on the direction of KKR Co i.e., KKR Co and Brookfield Corp go up and down completely randomly.
Pair Corralation between KKR Co and Brookfield Corp
Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Brookfield Corp. In addition to that, KKR Co is 1.57 times more volatile than Brookfield Corp. It trades about -0.19 of its total potential returns per unit of risk. Brookfield Corp is currently generating about 0.14 per unit of volatility. If you would invest 5,818 in Brookfield Corp on November 18, 2024 and sell it today you would earn a total of 274.00 from holding Brookfield Corp or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. Brookfield Corp
Performance |
| Timeline |
| KKR Co LP |
| Brookfield Corp |
KKR Co and Brookfield Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Brookfield Corp
The main advantage of trading using opposite KKR Co and Brookfield Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Brookfield Corp 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 Brookfield Corp will offset losses from the drop in Brookfield Corp's long position.| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl Capital |
| Brookfield Corp vs. Horizon Space Acquisition | Brookfield Corp vs. Erayak Power Solution | Brookfield Corp vs. AlphaTime Acquisition Corp | Brookfield Corp vs. Israel Acquisitions Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |