Correlation Between Worldwide Healthcare and FS KKR

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Can any of the company-specific risk be diversified away by investing in both Worldwide Healthcare 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 Worldwide Healthcare and FS KKR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldwide Healthcare Trust and FS KKR Capital, you can compare the effects of market volatilities on Worldwide Healthcare 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 Worldwide Healthcare with a short position of FS KKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and FS KKR.

Diversification Opportunities for Worldwide Healthcare and FS KKR

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Worldwide and FSK is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust 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 Worldwide Healthcare 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 Worldwide Healthcare Trust 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 Worldwide Healthcare i.e., Worldwide Healthcare and FS KKR go up and down completely randomly.

Pair Corralation between Worldwide Healthcare and FS KKR

Assuming the 90 days trading horizon Worldwide Healthcare Trust is expected to generate 0.65 times more return on investment than FS KKR. However, Worldwide Healthcare Trust is 1.53 times less risky than FS KKR. It trades about 0.3 of its potential returns per unit of risk. FS KKR Capital is currently generating about -0.08 per unit of risk. If you would invest  33,191  in Worldwide Healthcare Trust on August 30, 2025 and sell it today you would earn a total of  6,159  from holding Worldwide Healthcare Trust or generate 18.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Worldwide Healthcare Trust  vs.  FS KKR Capital

 Performance 
       Timeline  
Worldwide Healthcare 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Worldwide Healthcare Trust are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Worldwide Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.
FS KKR Capital 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days FS KKR Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Worldwide Healthcare and FS KKR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Worldwide Healthcare and FS KKR

The main advantage of trading using opposite Worldwide Healthcare and FS KKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Healthcare 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 Worldwide Healthcare Trust 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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