Correlation Between Papaya Growth and KKR Co
Can any of the company-specific risk be diversified away by investing in both Papaya Growth 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 Papaya Growth and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Papaya Growth Opportunity and KKR Co LP, you can compare the effects of market volatilities on Papaya Growth 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 Papaya Growth with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papaya Growth and KKR Co.
Diversification Opportunities for Papaya Growth and KKR Co
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Papaya and KKR is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Papaya Growth Opportunity 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 Papaya Growth 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 Papaya Growth Opportunity 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 Papaya Growth i.e., Papaya Growth and KKR Co go up and down completely randomly.
Pair Corralation between Papaya Growth and KKR Co
Assuming the 90 days horizon Papaya Growth Opportunity is expected to under-perform the KKR Co. But the stock apears to be less risky and, when comparing its historical volatility, Papaya Growth Opportunity is 1.38 times less risky than KKR Co. The stock trades about -0.02 of its potential returns per unit of risk. The 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 Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Papaya Growth Opportunity vs. KKR Co LP
Performance |
Timeline |
Papaya Growth Opportunity |
KKR Co LP |
Papaya Growth and KKR Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Papaya Growth and KKR Co
The main advantage of trading using opposite Papaya Growth and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papaya Growth 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.Papaya Growth vs. Top KingWin Ltd | Papaya Growth vs. Mercurity Fintech Holding | Papaya Growth vs. Zhong Yang Financial | Papaya Growth 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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