Correlation Between Orix Corp and KKR Co
Can any of the company-specific risk be diversified away by investing in both Orix Corp 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 Orix Corp and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orix Corp Ads and KKR Co LP, you can compare the effects of market volatilities on Orix Corp 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 Orix Corp with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orix Corp and KKR Co.
Diversification Opportunities for Orix Corp and KKR Co
Excellent diversification
The 3 months correlation between Orix and KKR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads 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 Orix 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 Orix Corp Ads 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 Orix Corp i.e., Orix Corp and KKR Co go up and down completely randomly.
Pair Corralation between Orix Corp and KKR Co
Assuming the 90 days trading horizon Orix Corp is expected to generate 2.57 times less return on investment than KKR Co. But when comparing it to its historical volatility, Orix Corp Ads is 1.52 times less risky than KKR Co. It trades about 0.19 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 12,680 in KKR Co LP on September 1, 2024 and sell it today you would earn a total of 2,618 from holding KKR Co LP or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orix Corp Ads vs. KKR Co LP
Performance |
| Timeline |
| Orix Corp Ads |
| KKR Co LP |
Orix Corp and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orix Corp and KKR Co
The main advantage of trading using opposite Orix Corp and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp 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.| Orix Corp vs. UMC Electronics Co | Orix Corp vs. X FAB Silicon Foundries | Orix Corp vs. METHODE ELECTRONICS | Orix Corp vs. UET United Electronic |
| KKR Co vs. VARIOUS EATERIES LS | KKR Co vs. Zurich Insurance Group | KKR Co vs. Zijin Mining Group | KKR Co vs. Perseus Mining Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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