Correlation Between Kite Realty and BCB Bancorp

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

Diversification Opportunities for Kite Realty and BCB Bancorp

0.86

Correlation Coefficient

Kite Realty  BCB Bancorp

Very poor diversification

The 3 months correlation between Kite and BCB is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Kite Realty i.e., Kite Realty and BCB Bancorp go up and down completely randomly.

Pair Corralation between Kite Realty and BCB Bancorp

Considering the 90-day investment horizon Kite Realty Group is expected to generate 0.83 times more return on investment than BCB Bancorp. However, Kite Realty Group is 1.2 times less risky than BCB Bancorp. It trades about -0.1 of its potential returns per unit of risk. BCB Bancorp is currently generating about -0.11 per unit of risk. If you would invest  2,500  in Kite Realty Group on December 26, 2024 and sell it today you would lose (248.00) from holding Kite Realty Group or give up 9.92% of portfolio value over 90 days.

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

Kite Realty Group  vs.  BCB Bancorp

Kite Realty Group

Risk-Adjusted Performance

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BCB Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kite Realty and BCB Bancorp

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

The idea behind Kite Realty Group and BCB Bancorp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.