Correlation Between AllianceBernstein and KKR Co
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and KKR Co 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 AllianceBernstein and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AllianceBernstein Holding LP and KKR Co LP, you can compare the effects of market volatilities on AllianceBernstein and KKR Co 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 AllianceBernstein with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and KKR Co.
Diversification Opportunities for AllianceBernstein and KKR Co
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AllianceBernstein and KKR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and AllianceBernstein 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 AllianceBernstein Holding LP are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and KKR Co go up and down completely randomly.
Pair Corralation between AllianceBernstein and KKR Co
Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 1.6 times less return on investment than KKR Co. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 1.61 times less risky than KKR Co. It trades about 0.14 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,473 in KKR Co LP on July 18, 2024 and sell it today you would earn a total of 2,105 from holding KKR Co LP or generate 18.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AllianceBernstein Holding LP vs. KKR Co LP
Performance |
Timeline |
AllianceBernstein |
KKR Co LP |
AllianceBernstein and KKR Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AllianceBernstein and KKR Co
The main advantage of trading using opposite AllianceBernstein and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, KKR Co 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 Co will offset losses from the drop in KKR Co's long position.AllianceBernstein vs. Top KingWin Ltd | AllianceBernstein vs. Mercurity Fintech Holding | AllianceBernstein vs. Zhong Yang Financial | AllianceBernstein vs. Applied Blockchain |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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