Correlation Between Bluerock Homes and Kennedy Wilson

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

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

Diversification Opportunities for Bluerock Homes and Kennedy Wilson

0.41

Correlation Coefficient

Bluerock Homes  Kennedy Wilson

Very weak diversification

The 3 months correlation between Bluerock and Kennedy is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust 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 Bluerock Homes 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 Bluerock Homes Trust 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 Bluerock Homes i.e., Bluerock Homes and Kennedy Wilson go up and down completely randomly.

Pair Corralation between Bluerock Homes and Kennedy Wilson

Considering the 90-day investment horizon Bluerock Homes Trust is expected to generate 0.65 times more return on investment than Kennedy Wilson. However, Bluerock Homes Trust is 1.53 times less risky than Kennedy Wilson. It trades about -0.14 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about -0.1 per unit of risk. If you would invest  1,309  in Bluerock Homes Trust on December 28, 2024 and sell it today you would lose (147.00) from holding Bluerock Homes Trust or give up 11.23% of portfolio value over 90 days.

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

Bluerock Homes Trust  vs.  Kennedy Wilson Holdings

Bluerock Homes Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Kennedy Wilson Holdings

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bluerock Homes and Kennedy Wilson

The main advantage of trading using opposite Bluerock Homes and Kennedy Wilson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes 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 Bluerock Homes Trust 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.