Correlation Between Kite Realty and Osaka Steel

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

Diversification Opportunities for Kite Realty and Osaka Steel

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Correlation Coefficient

Kite Realty  Osaka Steel

Pay attention - limited upside

The 3 months correlation between Kite and Osaka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Osaka Steel Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osaka Steel Co, 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 Osaka Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osaka Steel Co, has no effect on the direction of Kite Realty i.e., Kite Realty and Osaka Steel go up and down completely randomly.

Pair Corralation between Kite Realty and Osaka Steel

Considering the 90-day investment horizon Kite Realty Group is expected to generate 19.8 times more return on investment than Osaka Steel. However, Kite Realty is 19.8 times more volatile than Osaka Steel Co,. It trades about 0.06 of its potential returns per unit of risk. Osaka Steel Co, is currently generating about 0.06 per unit of risk. If you would invest  2,144  in Kite Realty Group on October 7, 2024 and sell it today you would earn a total of  361.00  from holding Kite Realty Group or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kite Realty Group  vs.  Osaka Steel Co,

Kite Realty Group

Risk-Adjusted Performance

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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.

Osaka Steel Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osaka Steel Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Osaka Steel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kite Realty and Osaka Steel

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

The idea behind Kite Realty Group and Osaka Steel Co, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.