Correlation Between Nelnet and KKR Co
Can any of the company-specific risk be diversified away by investing in both Nelnet and KKR Co 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 Nelnet and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and KKR Co LP, you can compare the effects of market volatilities on Nelnet and KKR Co 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 Nelnet with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and KKR Co.
Diversification Opportunities for Nelnet and KKR Co
Very good diversification
The 3 months correlation between Nelnet and KKR is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and Nelnet 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 Nelnet Inc are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of Nelnet i.e., Nelnet and KKR Co go up and down completely randomly.
Pair Corralation between Nelnet and KKR Co
Considering the 90-day investment horizon Nelnet Inc is expected to generate 0.53 times more return on investment than KKR Co. However, Nelnet Inc is 1.88 times less risky than KKR Co. It trades about -0.2 of its potential returns per unit of risk. KKR Co LP is currently generating about -0.23 per unit of risk. If you would invest 10,796 in Nelnet Inc on October 15, 2024 and sell it today you would lose (504.00) from holding Nelnet Inc or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. KKR Co LP
Performance |
| Timeline |
| Nelnet Inc |
| KKR Co LP |
Nelnet and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and KKR Co
The main advantage of trading using opposite Nelnet and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, KKR Co 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 KKR Co will offset losses from the drop in KKR Co's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Federal Agricultural Mortgage | Nelnet vs. Navient Corp |
| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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