Correlation Between KKR Co and State Street
Can any of the company-specific risk be diversified away by investing in both KKR Co and State Street 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 State Street 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 State Street Corp, you can compare the effects of market volatilities on KKR Co and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and State Street.
Diversification Opportunities for KKR Co and State Street
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KKR and State is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Corp 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Corp has no effect on the direction of KKR Co i.e., KKR Co and State Street go up and down completely randomly.
Pair Corralation between KKR Co and State Street
Considering the 90-day investment horizon KKR Co LP is expected to generate 1.49 times more return on investment than State Street. However, KKR Co is 1.49 times more volatile than State Street Corp. It trades about 0.17 of its potential returns per unit of risk. State Street Corp is currently generating about 0.1 per unit of risk. If you would invest 7,440 in KKR Co LP on August 27, 2024 and sell it today you would earn a total of 8,423 from holding KKR Co LP or generate 113.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. State Street Corp
Performance |
| Timeline |
| KKR Co LP |
| State Street Corp |
KKR Co and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and State Street
The main advantage of trading using opposite KKR Co and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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