Correlation Between Kite Realty and Corpay

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

Diversification Opportunities for Kite Realty and Corpay

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Kite and Corpay is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Corpay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corpay Inc 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 Corpay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corpay Inc has no effect on the direction of Kite Realty i.e., Kite Realty and Corpay go up and down completely randomly.

Pair Corralation between Kite Realty and Corpay

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Corpay. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 1.35 times less risky than Corpay. The stock trades about 0.0 of its potential returns per unit of risk. The Corpay Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  33,302  in Corpay Inc on October 5, 2024 and sell it today you would earn a total of  691.00  from holding Corpay Inc or generate 2.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Kite Realty Group  vs.  Corpay Inc

 Performance 
       Timeline  
Kite Realty Group 

Risk-Adjusted Performance

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Weak
 
Strong
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.
Corpay Inc 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Corpay Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Corpay is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Kite Realty and Corpay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kite Realty and Corpay

The main advantage of trading using opposite Kite Realty and Corpay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Corpay 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 Corpay will offset losses from the drop in Corpay's long position.
The idea behind Kite Realty Group and Corpay 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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