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
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westpac and Kkr is 0.49. 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 1.35 times less return on investment than Kkr Credit. But when comparing it to its historical volatility, Westpac Banking is 2.5 times less risky than Kkr Credit. It trades about 0.11 of its potential returns per unit of risk. Kkr Credit Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Kkr Credit Income on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Kkr Credit Income or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| 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. Sayona Mining | Westpac Banking vs. Macquarie Technology Group | Westpac Banking vs. Ambertech | Westpac Banking vs. Readytech Holdings |
| Kkr Credit vs. Centuria Industrial Reit | Kkr Credit vs. Stelar Metals | Kkr Credit vs. Perseus Mining | Kkr Credit vs. FireFly Metals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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