Correlation Between Kite Realty and Eerly Govt

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

Diversification Opportunities for Kite Realty and Eerly Govt

0.5

Correlation Coefficient

Kite Realty  Eerly Govt

Very weak diversification

The 3 months correlation between Kite and Eerly is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Eerly Govt Ppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eerly Govt Ppty 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 Eerly Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eerly Govt Ppty has no effect on the direction of Kite Realty i.e., Kite Realty and Eerly Govt go up and down completely randomly.

Pair Corralation between Kite Realty and Eerly Govt

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Eerly Govt. In addition to that, Kite Realty Group is as risky as Eerly Govt. It trades about -0.1 of its total potential returns per unit of risk. Eerly Govt Ppty is currently generating about -0.04 per unit of volatility. If you would invest  1,096  in Eerly Govt Ppty on December 26, 2024 and sell it today you would lose (51.00) from holding Eerly Govt Ppty or give up 4.65% of portfolio value over 90 days.

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

Kite Realty Group  vs.  Eerly Govt Ppty

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.

Eerly Govt Ppty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eerly Govt Ppty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Eerly Govt is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kite Realty and Eerly Govt

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

The idea behind Kite Realty Group and Eerly Govt Ppty 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.