Correlation Between KKR Co and Global Lights
Can any of the company-specific risk be diversified away by investing in both KKR Co and Global Lights 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 Global Lights 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 Global Lights Acquisition, you can compare the effects of market volatilities on KKR Co and Global Lights 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 Global Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Global Lights.
Diversification Opportunities for KKR Co and Global Lights
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KKR and Global is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Global Lights Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lights 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 Global Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lights Acquisition has no effect on the direction of KKR Co i.e., KKR Co and Global Lights go up and down completely randomly.
Pair Corralation between KKR Co and Global Lights
Considering the 90-day investment horizon KKR Co LP is expected to generate 12.83 times more return on investment than Global Lights. However, KKR Co is 12.83 times more volatile than Global Lights Acquisition. It trades about 0.12 of its potential returns per unit of risk. Global Lights Acquisition is currently generating about 0.14 per unit of risk. If you would invest 5,616 in KKR Co LP on October 25, 2024 and sell it today you would earn a total of 10,535 from holding KKR Co LP or generate 187.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.4% |
| Values | Daily Returns |
KKR Co LP vs. Global Lights Acquisition
Performance |
| Timeline |
| KKR Co LP |
| Global Lights Acquisition |
KKR Co and Global Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Global Lights
The main advantage of trading using opposite KKR Co and Global Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Global Lights 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 Global Lights will offset losses from the drop in Global Lights' long position.| KKR Co vs. MFS Investment Grade | KKR Co vs. Eaton Vance National | KKR Co vs. Nuveen California Select | KKR Co vs. Federated Premier Municipal |
| Global Lights vs. Life Time Group | Global Lights vs. Sonos Inc | Global Lights vs. BRP Inc | Global Lights vs. Playa Hotels Resorts |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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