Correlation Between Carlyle and KKRS

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

By analyzing existing cross correlation between The Carlyle Group and KKRS, you can compare the effects of market volatilities on Carlyle and KKRS 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 Carlyle with a short position of KKRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and KKRS.

Diversification Opportunities for Carlyle and KKRS

0.58

Correlation Coefficient

Carlyle  KKRS

Very weak diversification

The 3 months correlation between Carlyle and KKRS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Carlyle Group and KKRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKRS and Carlyle 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 The Carlyle Group are associated (or correlated) with KKRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKRS has no effect on the direction of Carlyle i.e., Carlyle and KKRS go up and down completely randomly.

Pair Corralation between Carlyle and KKRS

Assuming the 90 days horizon The Carlyle Group is expected to generate 1.02 times more return on investment than KKRS. However, Carlyle is 1.02 times more volatile than KKRS. It trades about -0.09 of its potential returns per unit of risk. KKRS is currently generating about -0.1 per unit of risk. If you would invest  1,953  in The Carlyle Group on September 17, 2024 and sell it today you would lose (120.00) from holding The Carlyle Group or give up 6.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Carlyle Group  vs.  KKRS

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Carlyle is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

KKRS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KKRS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Carlyle and KKRS

The main advantage of trading using opposite Carlyle and KKRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, KKRS 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 KKRS will offset losses from the drop in KKRS's long position.

The idea behind The Carlyle Group and KKRS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.