Correlation Between Gap, and Kite Realty

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

By analyzing existing cross correlation between The Gap, and Kite Realty Group, you can compare the effects of market volatilities on Gap, and Kite 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 Gap, with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Kite Realty.

Diversification Opportunities for Gap, and Kite Realty

-0.06

Correlation Coefficient

Gap,  Kite Realty

Good diversification

The 3 months correlation between Gap, and Kite is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group and Gap, 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 The Gap, are associated (or correlated) with Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Gap, i.e., Gap, and Kite Realty go up and down completely randomly.

Pair Corralation between Gap, and Kite Realty

Considering the 90-day investment horizon The Gap, is expected to generate 1.48 times more return on investment than Kite Realty. However, Gap, is 1.48 times more volatile than Kite Realty Group. It trades about -0.04 of its potential returns per unit of risk. Kite Realty Group is currently generating about -0.22 per unit of risk. If you would invest  2,386  in The Gap, on October 22, 2024 and sell it today you would lose (40.00) from holding The Gap, or give up 1.68% of portfolio value over 90 days.

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

The Gap,  vs.  Kite Realty Group

Gap,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kite Realty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kite Realty Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Gap, and Kite Realty

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

The idea behind The Gap, and Kite Realty Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.