Correlation Between Kite Realty and Inventrust Properties

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

Diversification Opportunities for Kite Realty and Inventrust Properties

0.81

Correlation Coefficient

Kite Realty  Inventrust Properties

Very poor diversification

The 3 months correlation between Kite and Inventrust is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Inventrust Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventrust Properties 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 Inventrust Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventrust Properties has no effect on the direction of Kite Realty i.e., Kite Realty and Inventrust Properties go up and down completely randomly.

Pair Corralation between Kite Realty and Inventrust Properties

Considering the 90-day investment horizon Kite Realty Group is expected to generate 1.06 times more return on investment than Inventrust Properties. However, Kite Realty is 1.06 times more volatile than Inventrust Properties Corp. It trades about 0.05 of its potential returns per unit of risk. Inventrust Properties Corp is currently generating about 0.05 per unit of risk. If you would invest  2,015  in Kite Realty Group on September 3, 2024 and sell it today you would earn a total of  742.00  from holding Kite Realty Group or generate 36.82% return on investment over 90 days.

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

Kite Realty Group  vs.  Inventrust Properties Corp

Kite Realty Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Kite Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Inventrust Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inventrust Properties Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Inventrust Properties may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kite Realty and Inventrust Properties

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

The idea behind Kite Realty Group and Inventrust Properties Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.