Correlation Between KKR Co and TPG
Can any of the company-specific risk be diversified away by investing in both KKR Co and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on KKR Co and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and TPG.
Diversification Opportunities for KKR Co and TPG
Almost no diversification
The 3 months correlation between KKR and TPG is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of KKR Co i.e., KKR Co and TPG go up and down completely randomly.
Pair Corralation between KKR Co and TPG
Considering the 90-day investment horizon KKR Co LP is expected to generate 0.98 times more return on investment than TPG. However, KKR Co LP is 1.02 times less risky than TPG. It trades about 0.16 of its potential returns per unit of risk. TPG Inc is currently generating about 0.16 per unit of risk. If you would invest 7,537 in KKR Co LP on August 26, 2024 and sell it today you would earn a total of 8,326 from holding KKR Co LP or generate 110.47% 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. TPG Inc
Performance |
| Timeline |
| KKR Co LP |
| TPG Inc |
KKR Co and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and TPG
The main advantage of trading using opposite KKR Co and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG'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 |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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