Correlation Between KKRS and United States

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

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

Diversification Opportunities for KKRS and United States

-0.74

Correlation Coefficient

KKRS  United States

Pay attention - limited upside

The 3 months correlation between KKRS and United is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding KKRS and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular and KKRS 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 KKRS are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of KKRS i.e., KKRS and United States go up and down completely randomly.

Pair Corralation between KKRS and United States

Given the investment horizon of 90 days KKRS is expected to under-perform the United States. In addition to that, KKRS is 2.1 times more volatile than United States Cellular. It trades about -0.14 of its total potential returns per unit of risk. United States Cellular is currently generating about 0.08 per unit of volatility. If you would invest  2,172  in United States Cellular on September 24, 2024 and sell it today you would earn a total of  53.00  from holding United States Cellular or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

KKRS  vs.  United States Cellular

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 unsteady 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.

United States Cellular

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, United States is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with KKRS and United States

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

The idea behind KKRS and United States Cellular 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.