Correlation Between Vanguard Wellington and Kkr Income

Can any of the company-specific risk be diversified away by investing in both Vanguard Wellington and Kkr Income 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 Vanguard Wellington and Kkr Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Wellington Fund and Kkr Income Opportunities, you can compare the effects of market volatilities on Vanguard Wellington and Kkr Income 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 Vanguard Wellington with a short position of Kkr Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Wellington and Kkr Income.

Diversification Opportunities for Vanguard Wellington and Kkr Income

0.8

Correlation Coefficient

Vanguard Wellington  Kkr Income

Very poor diversification

The 3 months correlation between Vanguard and Kkr is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Wellington Fund and Kkr Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kkr Me Opportunities and Vanguard Wellington 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 Vanguard Wellington Fund are associated (or correlated) with Kkr Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kkr Me Opportunities has no effect on the direction of Vanguard Wellington i.e., Vanguard Wellington and Kkr Income go up and down completely randomly.

Pair Corralation between Vanguard Wellington and Kkr Income

Assuming the 90 days horizon Vanguard Wellington Fund is expected to under-perform the Kkr Income. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Wellington Fund is 1.37 times less risky than Kkr Income. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Kkr Income Opportunities is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,338  in Kkr Income Opportunities on January 30, 2024 and sell it today you would lose (6.00) from holding Kkr Income Opportunities or give up 0.45% of portfolio value over 90 days.

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

Vanguard Wellington Fund  vs.  Kkr Income Opportunities

Vanguard Wellington

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Wellington Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Wellington is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kkr Me Opportunities

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kkr Income Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy forward indicators, Kkr Income is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Wellington and Kkr Income

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

The idea behind Vanguard Wellington Fund and Kkr Income Opportunities 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.