Correlation Between Kite Realty and Netstreit Corp

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

Diversification Opportunities for Kite Realty and Netstreit Corp

0.76

Correlation Coefficient

Kite Realty  Netstreit Corp

Poor diversification

The 3 months correlation between Kite and Netstreit is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Netstreit Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netstreit Corp 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 Netstreit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netstreit Corp has no effect on the direction of Kite Realty i.e., Kite Realty and Netstreit Corp go up and down completely randomly.

Pair Corralation between Kite Realty and Netstreit Corp

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Netstreit Corp. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 1.05 times less risky than Netstreit Corp. The stock trades about -0.16 of its potential returns per unit of risk. The Netstreit Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,586  in Netstreit Corp on December 1, 2024 and sell it today you would lose (90.00) from holding Netstreit Corp or give up 5.67% of portfolio value over 90 days.

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

Kite Realty Group  vs.  Netstreit Corp

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Netstreit Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netstreit Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Netstreit Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kite Realty and Netstreit Corp

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

The idea behind Kite Realty Group and Netstreit 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.