Correlation Between Rithm Capital and KKR Real
Can any of the company-specific risk be diversified away by investing in both Rithm Capital and KKR Real 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 Rithm Capital and KKR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Capital Corp and KKR Real Estate, you can compare the effects of market volatilities on Rithm Capital and KKR Real 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 Rithm Capital with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and KKR Real.
Diversification Opportunities for Rithm Capital and KKR Real
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rithm and KKR is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Real Estate and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of Rithm Capital i.e., Rithm Capital and KKR Real go up and down completely randomly.
Pair Corralation between Rithm Capital and KKR Real
Assuming the 90 days trading horizon Rithm Capital Corp is expected to generate 0.44 times more return on investment than KKR Real. However, Rithm Capital Corp is 2.26 times less risky than KKR Real. It trades about 0.09 of its potential returns per unit of risk. KKR Real Estate is currently generating about 0.0 per unit of risk. If you would invest 1,735 in Rithm Capital Corp on August 23, 2024 and sell it today you would earn a total of 794.00 from holding Rithm Capital Corp or generate 45.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. KKR Real Estate
Performance |
| Timeline |
| Rithm Capital Corp |
| KKR Real Estate |
Rithm Capital and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and KKR Real
The main advantage of trading using opposite Rithm Capital and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, KKR Real 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 Real will offset losses from the drop in KKR Real's long position.| Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. PennyMac Mortgage Investment |
| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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