Correlation Between KKR Co and Nabors Energy
Can any of the company-specific risk be diversified away by investing in both KKR Co and Nabors Energy 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 Nabors Energy 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 Nabors Energy Transition, you can compare the effects of market volatilities on KKR Co and Nabors Energy 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 Nabors Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Nabors Energy.
Diversification Opportunities for KKR Co and Nabors Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KKR and Nabors is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Nabors Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Energy Transition 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 Nabors Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Energy Transition has no effect on the direction of KKR Co i.e., KKR Co and Nabors Energy go up and down completely randomly.
Pair Corralation between KKR Co and Nabors Energy
Considering the 90-day investment horizon KKR Co LP is expected to generate 7.26 times more return on investment than Nabors Energy. However, KKR Co is 7.26 times more volatile than Nabors Energy Transition. It trades about 0.12 of its potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.07 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 | Weak |
| Accuracy | 68.36% |
| Values | Daily Returns |
KKR Co LP vs. Nabors Energy Transition
Performance |
| Timeline |
| KKR Co LP |
| Nabors Energy Transition |
KKR Co and Nabors Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Nabors Energy
The main advantage of trading using opposite KKR Co and Nabors Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Nabors Energy 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 Nabors Energy will offset losses from the drop in Nabors Energy's 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 |
| Nabors Energy vs. PowerUp Acquisition Corp | Nabors Energy vs. Aquagold International | Nabors Energy vs. Morningstar Unconstrained Allocation | Nabors Energy vs. Thrivent High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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