Correlation Between Aztec Land and Kennedy Wilson

Can any of the company-specific risk be diversified away by investing in both Aztec Land and Kennedy Wilson 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 Aztec Land and Kennedy Wilson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aztec Land Comb and Kennedy Wilson Holdings, you can compare the effects of market volatilities on Aztec Land and Kennedy Wilson 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 Aztec Land with a short position of Kennedy Wilson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aztec Land and Kennedy Wilson.

Diversification Opportunities for Aztec Land and Kennedy Wilson

0.42

Correlation Coefficient

Aztec Land  Kennedy Wilson

Very weak diversification

The 3 months correlation between Aztec and Kennedy is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aztec Land Comb and Kennedy Wilson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennedy Wilson Holdings and Aztec Land 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 Aztec Land Comb are associated (or correlated) with Kennedy Wilson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennedy Wilson Holdings has no effect on the direction of Aztec Land i.e., Aztec Land and Kennedy Wilson go up and down completely randomly.

Pair Corralation between Aztec Land and Kennedy Wilson

Assuming the 90 days horizon Aztec Land Comb is expected to generate 0.92 times more return on investment than Kennedy Wilson. However, Aztec Land Comb is 1.09 times less risky than Kennedy Wilson. It trades about 0.16 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about 0.06 per unit of risk. If you would invest  57,000  in Aztec Land Comb on September 14, 2024 and sell it today you would earn a total of  23,000  from holding Aztec Land Comb or generate 40.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Aztec Land Comb  vs.  Kennedy Wilson Holdings

Aztec Land Comb

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Land Comb are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Aztec Land showed solid returns over the last few months and may actually be approaching a breakup point.

Kennedy Wilson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Wilson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kennedy Wilson is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aztec Land and Kennedy Wilson

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

The idea behind Aztec Land Comb and Kennedy Wilson Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..