Correlation Between Kite Realty and Creative Media

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

Diversification Opportunities for Kite Realty and Creative Media

-0.42

Correlation Coefficient

Kite Realty  Creative Media

Very good diversification

The 3 months correlation between Kite and Creative is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community 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 Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Kite Realty i.e., Kite Realty and Creative Media go up and down completely randomly.

Pair Corralation between Kite Realty and Creative Media

Considering the 90-day investment horizon Kite Realty Group is expected to generate 0.1 times more return on investment than Creative Media. However, Kite Realty Group is 10.12 times less risky than Creative Media. It trades about 0.08 of its potential returns per unit of risk. Creative Media Community is currently generating about -0.21 per unit of risk. If you would invest  2,562  in Kite Realty Group on September 5, 2024 and sell it today you would earn a total of  128.00  from holding Kite Realty Group or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kite Realty Group  vs.  Creative Media Community

Kite Realty Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Creative Media Community

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Media Community 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 fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kite Realty and Creative Media

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

The idea behind Kite Realty Group and Creative Media Community 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.