Correlation Between KKR Co and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both KKR Co and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on KKR Co and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Co and Plastic Omnium.
Diversification Opportunities for KKR Co and Plastic Omnium
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KKR and Plastic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding KKR Co LP and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of KKR Co i.e., KKR Co and Plastic Omnium go up and down completely randomly.
Pair Corralation between KKR Co and Plastic Omnium
Assuming the 90 days trading horizon KKR Co LP is expected to generate 0.87 times more return on investment than Plastic Omnium. However, KKR Co LP is 1.14 times less risky than Plastic Omnium. It trades about 0.07 of its potential returns per unit of risk. Plastic Omnium is currently generating about -0.03 per unit of risk. If you would invest 4,666 in KKR Co LP on January 12, 2025 and sell it today you would earn a total of 4,678 from holding KKR Co LP or generate 100.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Co LP vs. Plastic Omnium
Performance |
| Timeline |
| KKR Co LP |
| Plastic Omnium |
KKR Co and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Co and Plastic Omnium
The main advantage of trading using opposite KKR Co and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Co position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.The idea behind KKR Co LP and Plastic Omnium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Plastic Omnium vs. Fast Retailing Co | Plastic Omnium vs. H2O Retailing | Plastic Omnium vs. CN DATANG C | Plastic Omnium vs. Tradeweb Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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