Correlation Between Loews Corp and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Loews Corp and Kayne Anderson 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 Loews Corp and Kayne Anderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Kayne Anderson MLP, you can compare the effects of market volatilities on Loews Corp and Kayne Anderson 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 Loews Corp with a short position of Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Kayne Anderson.
Diversification Opportunities for Loews Corp and Kayne Anderson
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loews and Kayne is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Kayne Anderson MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson MLP and Loews Corp 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 Loews Corp are associated (or correlated) with Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson MLP has no effect on the direction of Loews Corp i.e., Loews Corp and Kayne Anderson go up and down completely randomly.
Pair Corralation between Loews Corp and Kayne Anderson
Taking into account the 90-day investment horizon Loews Corp is expected to generate 1.75 times less return on investment than Kayne Anderson. In addition to that, Loews Corp is 1.27 times more volatile than Kayne Anderson MLP. It trades about 0.29 of its total potential returns per unit of risk. Kayne Anderson MLP is currently generating about 0.63 per unit of volatility. If you would invest 1,142 in Kayne Anderson MLP on September 1, 2024 and sell it today you would earn a total of 209.00 from holding Kayne Anderson MLP or generate 18.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Kayne Anderson MLP
Performance |
| Timeline |
| Loews Corp |
| Kayne Anderson MLP |
Loews Corp and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Kayne Anderson
The main advantage of trading using opposite Loews Corp and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson's long position.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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