Correlation Between KKR Real and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both KKR Real and ACRES Commercial 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 KKR Real and ACRES Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KKR Real Estate and ACRES Commercial Realty, you can compare the effects of market volatilities on KKR Real and ACRES Commercial 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 KKR Real with a short position of ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Real and ACRES Commercial.
Diversification Opportunities for KKR Real and ACRES Commercial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KKR and ACRES is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding KKR Real Estate and ACRES Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRES Commercial Realty and KKR Real 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 KKR Real Estate are associated (or correlated) with ACRES Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRES Commercial Realty has no effect on the direction of KKR Real i.e., KKR Real and ACRES Commercial go up and down completely randomly.
Pair Corralation between KKR Real and ACRES Commercial
Assuming the 90 days trading horizon KKR Real Estate is expected to under-perform the ACRES Commercial. In addition to that, KKR Real is 1.36 times more volatile than ACRES Commercial Realty. It trades about -0.18 of its total potential returns per unit of risk. ACRES Commercial Realty is currently generating about 0.07 per unit of volatility. If you would invest 2,278 in ACRES Commercial Realty on September 26, 2024 and sell it today you would earn a total of 20.00 from holding ACRES Commercial Realty or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KKR Real Estate vs. ACRES Commercial Realty
Performance |
Timeline |
KKR Real Estate |
ACRES Commercial Realty |
KKR Real and ACRES Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KKR Real and ACRES Commercial
The main advantage of trading using opposite KKR Real and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Real position performs unexpectedly, ACRES Commercial 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 ACRES Commercial will offset losses from the drop in ACRES Commercial's long position.KKR Real vs. PennyMac Mortgage Investment | KKR Real vs. ACRES Commercial Realty | KKR Real vs. Arbor Realty Trust |
ACRES Commercial vs. KKR Real Estate | ACRES Commercial vs. PennyMac Mortgage Investment | ACRES Commercial vs. Arbor Realty Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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