Correlation Between Associated Capital and FS KKR

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

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

Diversification Opportunities for Associated Capital and FS KKR

0.62

Correlation Coefficient

Associated Capital  FS KKR

Poor diversification

The 3 months correlation between Associated and FSK is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and FS KKR Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS KKR Capital and Associated Capital 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 Associated Capital Group are associated (or correlated) with FS KKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS KKR Capital has no effect on the direction of Associated Capital i.e., Associated Capital and FS KKR go up and down completely randomly.

Pair Corralation between Associated Capital and FS KKR

Allowing for the 90-day total investment horizon Associated Capital is expected to generate 9.85 times less return on investment than FS KKR. In addition to that, Associated Capital is 1.1 times more volatile than FS KKR Capital. It trades about 0.01 of its total potential returns per unit of risk. FS KKR Capital is currently generating about 0.15 per unit of volatility. If you would invest  1,931  in FS KKR Capital on May 2, 2025 and sell it today you would earn a total of  201.00  from holding FS KKR Capital or generate 10.41% return on investment over 90 days.

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

Associated Capital Group  vs.  FS KKR Capital

Associated Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

FS KKR Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, FS KKR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Associated Capital and FS KKR

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

The idea behind Associated Capital Group and FS KKR Capital 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.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.