Correlation Between KKR Co and EVe Mobility
Can any of the company-specific risk be diversified away by investing in both KKR Co and EVe Mobility 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 EVe Mobility 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 EVe Mobility Acquisition, you can compare the effects of market volatilities on KKR Co and EVe Mobility 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 EVe Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and EVe Mobility.
Diversification Opportunities for KKR Co and EVe Mobility
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KKR and EVe is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and EVe Mobility Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVe Mobility Acquisition 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 EVe Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVe Mobility Acquisition has no effect on the direction of KKR Co i.e., KKR Co and EVe Mobility go up and down completely randomly.
Pair Corralation between KKR Co and EVe Mobility
Considering the 90-day investment horizon KKR Co LP is expected to generate 9.59 times more return on investment than EVe Mobility. However, KKR Co is 9.59 times more volatile than EVe Mobility Acquisition. It trades about 0.25 of its potential returns per unit of risk. EVe Mobility Acquisition is currently generating about 0.21 per unit of risk. If you would invest 13,041 in KKR Co LP on August 30, 2024 and sell it today you would earn a total of 2,962 from holding KKR Co LP or generate 22.71% 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. EVe Mobility Acquisition
Performance |
| Timeline |
| KKR Co LP |
| EVe Mobility Acquisition |
KKR Co and EVe Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and EVe Mobility
The main advantage of trading using opposite KKR Co and EVe Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, EVe Mobility 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 EVe Mobility will offset losses from the drop in EVe Mobility's long position.The idea behind KKR Co LP and EVe Mobility Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EVe Mobility vs. Pyrophyte Acquisition Corp | EVe Mobility vs. Cartesian Growth | EVe Mobility vs. Oak Woods Acquisition |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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