Correlation Between KKR Co and Horizon Technology
Can any of the company-specific risk be diversified away by investing in both KKR Co and Horizon Technology 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 Horizon Technology 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 Horizon Technology Finance, you can compare the effects of market volatilities on KKR Co and Horizon Technology 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 Horizon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Horizon Technology.
Diversification Opportunities for KKR Co and Horizon Technology
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KKR and Horizon is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Horizon Technology Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Technology 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 Horizon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Technology has no effect on the direction of KKR Co i.e., KKR Co and Horizon Technology go up and down completely randomly.
Pair Corralation between KKR Co and Horizon Technology
Considering the 90-day investment horizon KKR Co LP is expected to generate 2.35 times more return on investment than Horizon Technology. However, KKR Co is 2.35 times more volatile than Horizon Technology Finance. It trades about 0.35 of its potential returns per unit of risk. Horizon Technology Finance is currently generating about 0.01 per unit of risk. If you would invest 13,741 in KKR Co LP on September 2, 2024 and sell it today you would earn a total of 2,546 from holding KKR Co LP or generate 18.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. Horizon Technology Finance
Performance |
| Timeline |
| KKR Co LP |
| Horizon Technology |
KKR Co and Horizon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Horizon Technology
The main advantage of trading using opposite KKR Co and Horizon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Horizon Technology 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 Horizon Technology will offset losses from the drop in Horizon Technology'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 |
| Horizon Technology vs. Gladstone Capital | Horizon Technology vs. Gladstone Investment | Horizon Technology vs. Prospect Capital | Horizon Technology vs. Stellus Capital Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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