Correlation Between Kilroy Realty and Ventas

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

Diversification Opportunities for Kilroy Realty and Ventas

-0.81

Correlation Coefficient

Kilroy Realty  Ventas

Pay attention - limited upside

The 3 months correlation between Kilroy and Ventas is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and Ventas go up and down completely randomly.

Pair Corralation between Kilroy Realty and Ventas

Considering the 90-day investment horizon Kilroy Realty Corp is expected to under-perform the Ventas. In addition to that, Kilroy Realty is 1.21 times more volatile than Ventas Inc. It trades about -0.13 of its total potential returns per unit of risk. Ventas Inc is currently generating about 0.16 per unit of volatility. If you would invest  5,806  in Ventas Inc on December 28, 2024 and sell it today you would earn a total of  987.00  from holding Ventas Inc or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Kilroy Realty Corp  vs.  Ventas Inc

Kilroy Realty Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kilroy Realty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ventas Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ventas Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ventas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kilroy Realty and Ventas

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

The idea behind Kilroy Realty Corp and Ventas 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 Global Correlations module to find global opportunities by holding instruments from different markets.