Correlation Between FS KKR and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both FS KKR and Brookfield Asset 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 FS KKR and Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FS KKR Capital and Brookfield Asset Management, you can compare the effects of market volatilities on FS KKR and Brookfield Asset 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 FS KKR with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS KKR and Brookfield Asset.
Diversification Opportunities for FS KKR and Brookfield Asset
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSK and Brookfield is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and FS KKR 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 FS KKR Capital are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of FS KKR i.e., FS KKR and Brookfield Asset go up and down completely randomly.
Pair Corralation between FS KKR and Brookfield Asset
Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.43 times more return on investment than Brookfield Asset. However, FS KKR Capital is 2.3 times less risky than Brookfield Asset. It trades about 0.04 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about -0.18 per unit of risk. If you would invest 1,910 in FS KKR Capital on February 2, 2024 and sell it today you would earn a total of 11.00 from holding FS KKR Capital or generate 0.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FS KKR Capital vs. Brookfield Asset Management
Performance |
Timeline |
FS KKR Capital |
Brookfield Asset Man |
FS KKR and Brookfield Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FS KKR and Brookfield Asset
The main advantage of trading using opposite FS KKR and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset's long position.FS KKR vs. Federated Premier Municipal | FS KKR vs. Blackrock Muniyield | FS KKR vs. NXG NextGen Infrastructure | FS KKR vs. BlackRock Capital Allocation |
Brookfield Asset vs. Federated Premier Municipal | Brookfield Asset vs. Blackrock Muniyield | Brookfield Asset vs. NXG NextGen Infrastructure | Brookfield Asset vs. BlackRock Capital Allocation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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