Correlation Between Kite Realty and Artisan Partners

Can any of the company-specific risk be diversified away by investing in both Kite Realty and Artisan Partners 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 Kite Realty and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kite Realty Group and Artisan Partners Asset, you can compare the effects of market volatilities on Kite Realty and Artisan Partners 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 Kite Realty with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Artisan Partners.

Diversification Opportunities for Kite Realty and Artisan Partners

0.76

Correlation Coefficient

Kite Realty  Artisan Partners

Poor diversification

The 3 months correlation between Kite and Artisan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Kite 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 Kite Realty Group are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Kite Realty i.e., Kite Realty and Artisan Partners go up and down completely randomly.

Pair Corralation between Kite Realty and Artisan Partners

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Artisan Partners. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 1.72 times less risky than Artisan Partners. The stock trades about -0.03 of its potential returns per unit of risk. The Artisan Partners Asset is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,242  in Artisan Partners Asset on September 27, 2024 and sell it today you would earn a total of  182.00  from holding Artisan Partners Asset or generate 4.29% return on investment over 90 days.

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

Kite Realty Group  vs.  Artisan Partners Asset

Kite Realty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kite Realty Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kite Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Artisan Partners Asset

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kite Realty and Artisan Partners

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

The idea behind Kite Realty Group and Artisan Partners Asset 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.