Correlation Between KKRS and Carlyle
Can any of the company-specific risk be diversified away by investing in both KKRS and Carlyle 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 KKRS and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KKRS and The Carlyle Group, you can compare the effects of market volatilities on KKRS and Carlyle 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 KKRS with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKRS and Carlyle.
Diversification Opportunities for KKRS and Carlyle
Very weak diversification
The 3 months correlation between KKRS and Carlyle is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KKRS and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and KKRS 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 KKRS are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of KKRS i.e., KKRS and Carlyle go up and down completely randomly.
Pair Corralation between KKRS and Carlyle
Given the investment horizon of 90 days KKRS is expected to under-perform the Carlyle. In addition to that, KKRS is 1.04 times more volatile than The Carlyle Group. It trades about -0.25 of its total potential returns per unit of risk. The Carlyle Group is currently generating about -0.19 per unit of volatility. If you would invest 1,985 in The Carlyle Group on August 24, 2024 and sell it today you would lose (61.00) from holding The Carlyle Group or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKRS vs. The Carlyle Group
Performance |
| Timeline |
| KKRS |
| Carlyle Group |
KKRS and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKRS and Carlyle
The main advantage of trading using opposite KKRS and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKRS position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| KKRS vs. United States Cellular | KKRS vs. United States Cellular | KKRS vs. Southern Company Series | KKRS vs. Affiliated Managers Group, |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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