Correlation Between KKR Co and Equus Total
Can any of the company-specific risk be diversified away by investing in both KKR Co and Equus Total 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 Equus Total 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 Equus Total Return, you can compare the effects of market volatilities on KKR Co and Equus Total 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 Equus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Equus Total.
Diversification Opportunities for KKR Co and Equus Total
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KKR and Equus is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Equus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equus Total Return 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 Equus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equus Total Return has no effect on the direction of KKR Co i.e., KKR Co and Equus Total go up and down completely randomly.
Pair Corralation between KKR Co and Equus Total
Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Equus Total. But the stock apears to be less risky and, when comparing its historical volatility, KKR Co LP is 1.66 times less risky than Equus Total. The stock trades about -0.34 of its potential returns per unit of risk. The Equus Total Return is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Equus Total Return on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Equus Total Return or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KKR Co LP vs. Equus Total Return
Performance |
| Timeline |
| KKR Co LP |
| Equus Total Return |
KKR Co and Equus Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Equus Total
The main advantage of trading using opposite KKR Co and Equus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Equus Total 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 Equus Total will offset losses from the drop in Equus Total'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 |
| Equus Total vs. Rand Capital Corp | Equus Total vs. Gabelli Convertible And | Equus Total vs. Mfs Intermediate High | Equus Total vs. RENN Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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