Correlation Between KKR Co and Visa
Can any of the company-specific risk be diversified away by investing in both KKR Co and Visa 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 Visa 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 Visa Class A, you can compare the effects of market volatilities on KKR Co and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Visa.
Diversification Opportunities for KKR Co and Visa
Very poor diversification
The 3 months correlation between KKR and Visa is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of KKR Co i.e., KKR Co and Visa go up and down completely randomly.
Pair Corralation between KKR Co and Visa
Considering the 90-day investment horizon KKR Co LP is expected to under-perform the Visa. In addition to that, KKR Co is 1.99 times more volatile than Visa Class A. It trades about -0.08 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.05 per unit of volatility. If you would invest 31,032 in Visa Class A on September 12, 2024 and sell it today you would earn a total of 206.00 from holding Visa Class A or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. Visa Class A
Performance |
| Timeline |
| KKR Co LP |
| Visa Class A |
KKR Co and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Visa
The main advantage of trading using opposite KKR Co and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa'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 |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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