Correlation Between KKR Real and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both KKR Real and Cherry Hill 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 Real and Cherry Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KKR Real Estate and Cherry Hill Mortgage, you can compare the effects of market volatilities on KKR Real and Cherry Hill 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 Real with a short position of Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Real and Cherry Hill.
Diversification Opportunities for KKR Real and Cherry Hill
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between KKR and Cherry is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KKR Real Estate and Cherry Hill Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherry Hill Mortgage and KKR Real 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 Real Estate are associated (or correlated) with Cherry Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherry Hill Mortgage has no effect on the direction of KKR Real i.e., KKR Real and Cherry Hill go up and down completely randomly.
Pair Corralation between KKR Real and Cherry Hill
Given the investment horizon of 90 days KKR Real Estate is expected to generate 3.27 times more return on investment than Cherry Hill. However, KKR Real is 3.27 times more volatile than Cherry Hill Mortgage. It trades about 0.13 of its potential returns per unit of risk. Cherry Hill Mortgage is currently generating about -0.1 per unit of risk. If you would invest 1,061 in KKR Real Estate on November 18, 2024 and sell it today you would earn a total of 71.00 from holding KKR Real Estate or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Real Estate vs. Cherry Hill Mortgage
Performance |
| Timeline |
| KKR Real Estate |
| Cherry Hill Mortgage |
KKR Real and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Real and Cherry Hill
The main advantage of trading using opposite KKR Real and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Real position performs unexpectedly, Cherry Hill 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 Cherry Hill will offset losses from the drop in Cherry Hill's long position.| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
| Cherry Hill vs. Lument Finance Trust | Cherry Hill vs. PennyMac Mortgage Investment | Cherry Hill vs. AG Mortgage Investment | Cherry Hill vs. Invesco Mortgage Capital |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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