Correlation Between KKR Co and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KKR Co and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on KKR Co and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Dow Jones.
Diversification Opportunities for KKR Co and Dow Jones
Almost no diversification
The 3 months correlation between KKR and Dow is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of KKR Co i.e., KKR Co and Dow Jones go up and down completely randomly.
Pair Corralation between KKR Co and Dow Jones
Considering the 90-day investment horizon KKR Co LP is expected to generate 2.45 times more return on investment than Dow Jones. However, KKR Co is 2.45 times more volatile than Dow Jones Industrial. It trades about 0.25 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 14,057 in KKR Co LP on August 27, 2024 and sell it today you would earn a total of 1,837 from holding KKR Co LP or generate 13.07% 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. Dow Jones Industrial
Performance |
| Timeline |
KKR Co and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KKR Co LP
Pair trading matchups for KKR Co
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KKR Co and Dow Jones
The main advantage of trading using opposite KKR Co and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl Capital |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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