Correlation Between KKR Co and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both KKR Co and Macquarie Group 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 Macquarie Group 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 Macquarie Group Limited, you can compare the effects of market volatilities on KKR Co and Macquarie Group 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 Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Macquarie Group.
Diversification Opportunities for KKR Co and Macquarie Group
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KKR and Macquarie is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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 Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of KKR Co i.e., KKR Co and Macquarie Group go up and down completely randomly.
Pair Corralation between KKR Co and Macquarie Group
Assuming the 90 days trading horizon KKR Co LP is expected to generate 1.73 times more return on investment than Macquarie Group. However, KKR Co is 1.73 times more volatile than Macquarie Group Limited. It trades about 0.24 of its potential returns per unit of risk. Macquarie Group Limited is currently generating about 0.1 per unit of risk. If you would invest 13,120 in KKR Co LP on August 29, 2024 and sell it today you would earn a total of 2,042 from holding KKR Co LP or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
KKR Co LP vs. Macquarie Group Limited
Performance |
| Timeline |
| KKR Co LP |
| Macquarie Group |
KKR Co and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Macquarie Group
The main advantage of trading using opposite KKR Co and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Macquarie Group 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| KKR Co vs. Macquarie Group Limited | KKR Co vs. MSCI Inc | KKR Co vs. Superior Plus Corp | KKR Co vs. NMI Holdings |
| Macquarie Group vs. Monster Beverage Corp | Macquarie Group vs. Molson Coors Beverage | Macquarie Group vs. National Retail Properties | Macquarie Group vs. CANON MARKETING JP |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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