Correlation Between CareTrust REIT and Kennedy Wilson
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT 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 CareTrust REIT and Kennedy Wilson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and Kennedy Wilson Holdings, you can compare the effects of market volatilities on CareTrust REIT 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 CareTrust REIT with a short position of Kennedy Wilson. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and Kennedy Wilson.
Diversification Opportunities for CareTrust REIT and Kennedy Wilson
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CareTrust and Kennedy is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT 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 CareTrust REIT 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 CareTrust REIT 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 CareTrust REIT i.e., CareTrust REIT and Kennedy Wilson go up and down completely randomly.
Pair Corralation between CareTrust REIT and Kennedy Wilson
Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.59 times more return on investment than Kennedy Wilson. However, CareTrust REIT is 1.7 times less risky than Kennedy Wilson. It trades about 0.08 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about -0.02 per unit of risk. If you would invest 1,714 in CareTrust REIT on September 23, 2024 and sell it today you would earn a total of 1,022 from holding CareTrust REIT or generate 59.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CareTrust REIT vs. Kennedy Wilson Holdings
Performance |
Timeline |
CareTrust REIT |
Kennedy Wilson Holdings |
CareTrust REIT and Kennedy Wilson Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CareTrust REIT and Kennedy Wilson
The main advantage of trading using opposite CareTrust REIT and Kennedy Wilson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT 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.CareTrust REIT vs. Global Medical REIT | CareTrust REIT vs. Universal Health Realty | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. Healthcare Realty Trust |
Kennedy Wilson vs. CareTrust REIT | Kennedy Wilson vs. Global Medical REIT | Kennedy Wilson vs. Universal Health Realty | Kennedy Wilson vs. Healthpeak Properties |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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