Correlation Between KKR Co and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both KKR Co and Investcorp Europe 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 Investcorp Europe 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 Investcorp Europe Acquisition, you can compare the effects of market volatilities on KKR Co and Investcorp Europe 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 Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Investcorp Europe.
Diversification Opportunities for KKR Co and Investcorp Europe
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KKR and Investcorp is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe 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 Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of KKR Co i.e., KKR Co and Investcorp Europe go up and down completely randomly.
Pair Corralation between KKR Co and Investcorp Europe
Considering the 90-day investment horizon KKR Co is expected to generate 102.69 times less return on investment than Investcorp Europe. But when comparing it to its historical volatility, KKR Co LP is 90.43 times less risky than Investcorp Europe. It trades about 0.15 of its potential returns per unit of risk. Investcorp Europe Acquisition is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Investcorp Europe Acquisition on September 1, 2024 and sell it today you would lose (22.72) from holding Investcorp Europe Acquisition or give up 94.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 45.74% |
| Values | Daily Returns |
KKR Co LP vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| KKR Co LP |
| Investcorp Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
KKR Co and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Investcorp Europe
The main advantage of trading using opposite KKR Co and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe'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 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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