Correlation Between Westpac Banking and Kkr Credit
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Kkr Credit 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 Westpac Banking and Kkr Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Kkr Credit Income, you can compare the effects of market volatilities on Westpac Banking and Kkr Credit 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 Westpac Banking with a short position of Kkr Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Kkr Credit.
Diversification Opportunities for Westpac Banking and Kkr Credit
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westpac and Kkr is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Kkr Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kkr Credit Income and Westpac Banking 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 Westpac Banking are associated (or correlated) with Kkr Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kkr Credit Income has no effect on the direction of Westpac Banking i.e., Westpac Banking and Kkr Credit go up and down completely randomly.
Pair Corralation between Westpac Banking and Kkr Credit
Assuming the 90 days trading horizon Westpac Banking is expected to generate 0.39 times more return on investment than Kkr Credit. However, Westpac Banking is 2.58 times less risky than Kkr Credit. It trades about -0.04 of its potential returns per unit of risk. Kkr Credit Income is currently generating about -0.02 per unit of risk. If you would invest 10,722 in Westpac Banking on September 1, 2024 and sell it today you would lose (31.00) from holding Westpac Banking or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westpac Banking vs. Kkr Credit Income
Performance |
| Timeline |
| Westpac Banking |
| Kkr Credit Income |
Westpac Banking and Kkr Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Kkr Credit
The main advantage of trading using opposite Westpac Banking and Kkr Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Kkr Credit 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 Credit will offset losses from the drop in Kkr Credit's long position.| Westpac Banking vs. Ras Technology Holdings | Westpac Banking vs. Beston Global Food | Westpac Banking vs. Retail Food Group | Westpac Banking vs. TTG Fintech |
| Kkr Credit vs. Iron Road | Kkr Credit vs. Phoslock Environmental Technologies | Kkr Credit vs. Green Technology Metals | Kkr Credit vs. Legacy Iron Ore |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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