Correlation Between NIPPON PROLOGIS and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both NIPPON PROLOGIS and Kilroy Realty 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 NIPPON PROLOGIS and Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIPPON PROLOGIS REIT and Kilroy Realty Corp, you can compare the effects of market volatilities on NIPPON PROLOGIS and Kilroy Realty 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 NIPPON PROLOGIS with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIPPON PROLOGIS and Kilroy Realty.
Diversification Opportunities for NIPPON PROLOGIS and Kilroy Realty
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NIPPON and Kilroy is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding NIPPON PROLOGIS REIT and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp and NIPPON PROLOGIS 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 NIPPON PROLOGIS REIT are associated (or correlated) with Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of NIPPON PROLOGIS i.e., NIPPON PROLOGIS and Kilroy Realty go up and down completely randomly.
Pair Corralation between NIPPON PROLOGIS and Kilroy Realty
Assuming the 90 days trading horizon NIPPON PROLOGIS REIT is expected to generate 0.6 times more return on investment than Kilroy Realty. However, NIPPON PROLOGIS REIT is 1.65 times less risky than Kilroy Realty. It trades about 0.1 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about -0.16 per unit of risk. If you would invest 133,000 in NIPPON PROLOGIS REIT on December 29, 2024 and sell it today you would earn a total of 10,000 from holding NIPPON PROLOGIS REIT or generate 7.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NIPPON PROLOGIS REIT vs. Kilroy Realty Corp
Performance |
Timeline |
NIPPON PROLOGIS REIT |
Kilroy Realty Corp |
NIPPON PROLOGIS and Kilroy Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NIPPON PROLOGIS and Kilroy Realty
The main advantage of trading using opposite NIPPON PROLOGIS and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIPPON PROLOGIS position performs unexpectedly, Kilroy Realty 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.NIPPON PROLOGIS vs. Zurich Insurance Group | NIPPON PROLOGIS vs. Selective Insurance Group | NIPPON PROLOGIS vs. Universal Insurance Holdings | NIPPON PROLOGIS vs. HANOVER INSURANCE |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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