Correlation Between Kite Realty and Primerica

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

Diversification Opportunities for Kite Realty and Primerica

0.88

Correlation Coefficient

Kite Realty  Primerica

Very poor diversification

The 3 months correlation between Kite and Primerica is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Primerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primerica 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 Primerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primerica has no effect on the direction of Kite Realty i.e., Kite Realty and Primerica go up and down completely randomly.

Pair Corralation between Kite Realty and Primerica

Considering the 90-day investment horizon Kite Realty is expected to generate 1.66 times less return on investment than Primerica. But when comparing it to its historical volatility, Kite Realty Group is 1.08 times less risky than Primerica. It trades about 0.06 of its potential returns per unit of risk. Primerica is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  20,648  in Primerica on October 5, 2024 and sell it today you would earn a total of  6,528  from holding Primerica or generate 31.62% 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.  Primerica

Kite Realty Group

Risk-Adjusted Performance

0 of 100

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.

Primerica

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Primerica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Primerica is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kite Realty and Primerica

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

The idea behind Kite Realty Group and Primerica 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .