Correlation Between Broadmark Realty and KKR Real

Can any of the company-specific risk be diversified away by investing in both Broadmark Realty 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 Broadmark Realty and KKR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broadmark Realty Capital and KKR Real Estate, you can compare the effects of market volatilities on Broadmark Realty 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 Broadmark Realty with a short position of KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadmark Realty and KKR Real.

Diversification Opportunities for Broadmark Realty and KKR Real

-0.78

Correlation Coefficient

Broadmark Realty  KKR Real

Pay attention - limited upside

The 3 months correlation between Broadmark and KKR is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Broadmark Realty Capital 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 Broadmark Realty 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 Broadmark Realty Capital 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 Broadmark Realty i.e., Broadmark Realty and KKR Real go up and down completely randomly.

Pair Corralation between Broadmark Realty and KKR Real

If you would invest  1,133  in KKR Real Estate on September 3, 2024 and sell it today you would earn a total of  30.00  from holding KKR Real Estate or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Broadmark Realty Capital  vs.  KKR Real Estate

Broadmark Realty Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadmark Realty Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Broadmark Realty is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

KKR Real Estate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KKR Real Estate are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, KKR Real is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Broadmark Realty and KKR Real

The main advantage of trading using opposite Broadmark Realty and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadmark Realty 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.

The idea behind Broadmark Realty Capital and KKR Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.