Correlation Between Transamerica Capital and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Transamerica Capital 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 Transamerica Capital and Kayne Anderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Capital Growth and Kayne Anderson Renewable, you can compare the effects of market volatilities on Transamerica Capital 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 Transamerica Capital with a short position of Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Capital and Kayne Anderson.
Diversification Opportunities for Transamerica Capital and Kayne Anderson
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transamerica and Kayne is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Capital Growth and Kayne Anderson Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson Renewable and Transamerica 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 Transamerica Capital Growth 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 Renewable has no effect on the direction of Transamerica Capital i.e., Transamerica Capital and Kayne Anderson go up and down completely randomly.
Pair Corralation between Transamerica Capital and Kayne Anderson
Assuming the 90 days horizon Transamerica Capital Growth is expected to generate 2.34 times more return on investment than Kayne Anderson. However, Transamerica Capital is 2.34 times more volatile than Kayne Anderson Renewable. It trades about 0.25 of its potential returns per unit of risk. Kayne Anderson Renewable is currently generating about 0.03 per unit of risk. If you would invest 2,648 in Transamerica Capital Growth on November 2, 2024 and sell it today you would earn a total of 1,353 from holding Transamerica Capital Growth or generate 51.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Transamerica Capital Growth vs. Kayne Anderson Renewable
Performance |
| Timeline |
| Transamerica Capital |
| Kayne Anderson Renewable |
Transamerica Capital and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Capital and Kayne Anderson
The main advantage of trading using opposite Transamerica Capital and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Capital 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.| Transamerica Capital vs. Johcm Emerging Markets | Transamerica Capital vs. Siit Emerging Markets | Transamerica Capital vs. Ashmore Emerging Markets | Transamerica Capital vs. Doubleline Emerging Markets |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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