Correlation Between KKR Co and Oaktree Specialty
Can any of the company-specific risk be diversified away by investing in both KKR Co and Oaktree Specialty 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 Oaktree Specialty 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 Oaktree Specialty Lending, you can compare the effects of market volatilities on KKR Co and Oaktree Specialty 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 Oaktree Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Oaktree Specialty.
Diversification Opportunities for KKR Co and Oaktree Specialty
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KKR and Oaktree is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Oaktree Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Specialty Lending 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 Oaktree Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Specialty Lending has no effect on the direction of KKR Co i.e., KKR Co and Oaktree Specialty go up and down completely randomly.
Pair Corralation between KKR Co and Oaktree Specialty
Considering the 90-day investment horizon KKR Co LP is expected to generate 1.93 times more return on investment than Oaktree Specialty. However, KKR Co is 1.93 times more volatile than Oaktree Specialty Lending. It trades about 0.18 of its potential returns per unit of risk. Oaktree Specialty Lending is currently generating about -0.08 per unit of risk. If you would invest 10,288 in KKR Co LP on September 1, 2024 and sell it today you would earn a total of 5,999 from holding KKR Co LP or generate 58.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. Oaktree Specialty Lending
Performance |
| Timeline |
| KKR Co LP |
| Oaktree Specialty Lending |
KKR Co and Oaktree Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Oaktree Specialty
The main advantage of trading using opposite KKR Co and Oaktree Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Oaktree Specialty 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 Oaktree Specialty will offset losses from the drop in Oaktree Specialty'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 |
| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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