Correlation Between Kilroy Realty and BTB Real

Can any of the company-specific risk be diversified away by investing in both Kilroy Realty and BTB Real 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 BTB Real 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 BTB Real Estate, you can compare the effects of market volatilities on Kilroy Realty and BTB Real 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 BTB Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilroy Realty and BTB Real.

Diversification Opportunities for Kilroy Realty and BTB Real

0.67

Correlation Coefficient

Kilroy Realty  BTB Real

Poor diversification

The 3 months correlation between Kilroy and BTB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and BTB Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTB Real Estate 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 BTB Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTB Real Estate has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and BTB Real go up and down completely randomly.

Pair Corralation between Kilroy Realty and BTB Real

Considering the 90-day investment horizon Kilroy Realty Corp is expected to generate 1.98 times more return on investment than BTB Real. However, Kilroy Realty is 1.98 times more volatile than BTB Real Estate. It trades about 0.17 of its potential returns per unit of risk. BTB Real Estate is currently generating about 0.13 per unit of risk. If you would invest  3,475  in Kilroy Realty Corp on September 2, 2024 and sell it today you would earn a total of  678.00  from holding Kilroy Realty Corp or generate 19.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

Kilroy Realty Corp  vs.  BTB Real Estate

Kilroy Realty Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kilroy Realty Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Kilroy Realty exhibited solid returns over the last few months and may actually be approaching a breakup point.

BTB Real Estate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BTB Real Estate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, BTB Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kilroy Realty and BTB Real

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

The idea behind Kilroy Realty Corp and BTB Real Estate 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.