Correlation Between IRSA Inversiones and Kennedy Wilson

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

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

Diversification Opportunities for IRSA Inversiones and Kennedy Wilson

-0.05

Correlation Coefficient

IRSA Inversiones  Kennedy Wilson

Good diversification

The 3 months correlation between IRSA and Kennedy is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones Y 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 IRSA Inversiones 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 IRSA Inversiones Y 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 IRSA Inversiones i.e., IRSA Inversiones and Kennedy Wilson go up and down completely randomly.

Pair Corralation between IRSA Inversiones and Kennedy Wilson

Considering the 90-day investment horizon IRSA Inversiones Y is expected to generate 1.53 times more return on investment than Kennedy Wilson. However, IRSA Inversiones is 1.53 times more volatile than Kennedy Wilson Holdings. It trades about 0.18 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about -0.07 per unit of risk. If you would invest  1,108  in IRSA Inversiones Y on October 10, 2024 and sell it today you would earn a total of  417.00  from holding IRSA Inversiones Y or generate 37.64% return on investment over 90 days.

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

IRSA Inversiones Y  vs.  Kennedy Wilson Holdings

IRSA Inversiones Y

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IRSA Inversiones unveiled 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 latest inconsistent performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with IRSA Inversiones and Kennedy Wilson

The main advantage of trading using opposite IRSA Inversiones and Kennedy Wilson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Inversiones 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 IRSA Inversiones Y 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.