Correlation Between KENEDIX OFFICE and COUSINS PTIES

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

By analyzing existing cross correlation between KENEDIX OFFICE INV and COUSINS PTIES INC, you can compare the effects of market volatilities on KENEDIX OFFICE and COUSINS PTIES 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 KENEDIX OFFICE with a short position of COUSINS PTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and COUSINS PTIES.

Diversification Opportunities for KENEDIX OFFICE and COUSINS PTIES

0.32

Correlation Coefficient

KENEDIX OFFICE  COUSINS PTIES

Weak diversification

The 3 months correlation between KENEDIX and COUSINS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and COUSINS PTIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COUSINS PTIES INC and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with COUSINS PTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COUSINS PTIES INC has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and COUSINS PTIES go up and down completely randomly.

Pair Corralation between KENEDIX OFFICE and COUSINS PTIES

Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the COUSINS PTIES. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 1.35 times less risky than COUSINS PTIES. The stock trades about -0.01 of its potential returns per unit of risk. The COUSINS PTIES INC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,589  in COUSINS PTIES INC on October 8, 2024 and sell it today you would earn a total of  1,371  from holding COUSINS PTIES INC or generate 86.28% return on investment over 90 days.

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

KENEDIX OFFICE INV  vs.  COUSINS PTIES INC

KENEDIX OFFICE INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KENEDIX OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COUSINS PTIES INC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COUSINS PTIES INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, COUSINS PTIES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KENEDIX OFFICE and COUSINS PTIES

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

The idea behind KENEDIX OFFICE INV and COUSINS PTIES INC 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.