Correlation Between Kilroy Realty and AUTO TRADER
Can any of the company-specific risk be diversified away by investing in both Kilroy Realty and AUTO TRADER 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 Kilroy Realty and AUTO TRADER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kilroy Realty Corp and AUTO TRADER ADR, you can compare the effects of market volatilities on Kilroy Realty and AUTO TRADER 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 Kilroy Realty with a short position of AUTO TRADER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilroy Realty and AUTO TRADER.
Diversification Opportunities for Kilroy Realty and AUTO TRADER
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kilroy and AUTO is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and AUTO TRADER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTO TRADER ADR and Kilroy Realty 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 Kilroy Realty Corp are associated (or correlated) with AUTO TRADER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUTO TRADER ADR has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and AUTO TRADER go up and down completely randomly.
Pair Corralation between Kilroy Realty and AUTO TRADER
Assuming the 90 days horizon Kilroy Realty Corp is expected to under-perform the AUTO TRADER. In addition to that, Kilroy Realty is 1.59 times more volatile than AUTO TRADER ADR. It trades about -0.07 of its total potential returns per unit of risk. AUTO TRADER ADR is currently generating about -0.09 per unit of volatility. If you would invest 247.00 in AUTO TRADER ADR on December 3, 2024 and sell it today you would lose (19.00) from holding AUTO TRADER ADR or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kilroy Realty Corp vs. AUTO TRADER ADR
Performance |
Timeline |
Kilroy Realty Corp |
AUTO TRADER ADR |
Kilroy Realty and AUTO TRADER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kilroy Realty and AUTO TRADER
The main advantage of trading using opposite Kilroy Realty and AUTO TRADER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kilroy Realty position performs unexpectedly, AUTO TRADER 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 AUTO TRADER will offset losses from the drop in AUTO TRADER's long position.Kilroy Realty vs. FIH MOBILE | Kilroy Realty vs. PRECISION DRILLING P | Kilroy Realty vs. Singapore Telecommunications Limited | Kilroy Realty vs. PT Steel Pipe |
AUTO TRADER vs. BlueScope Steel Limited | AUTO TRADER vs. PT Steel Pipe | AUTO TRADER vs. Veolia Environnement SA | AUTO TRADER vs. TOMBADOR IRON LTD |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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