Correlation Between Kite Realty and 18539UAD7

Can any of the company-specific risk be diversified away by investing in both Kite Realty and 18539UAD7 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 18539UAD7 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 US18539UAD72, you can compare the effects of market volatilities on Kite Realty and 18539UAD7 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 18539UAD7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and 18539UAD7.

Diversification Opportunities for Kite Realty and 18539UAD7

0.34

Correlation Coefficient

Kite Realty  18539UAD7

Weak diversification

The 3 months correlation between Kite and 18539UAD7 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and US18539UAD72 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US18539UAD72 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 18539UAD7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US18539UAD72 has no effect on the direction of Kite Realty i.e., Kite Realty and 18539UAD7 go up and down completely randomly.

Pair Corralation between Kite Realty and 18539UAD7

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the 18539UAD7. In addition to that, Kite Realty is 1.29 times more volatile than US18539UAD72. It trades about -0.21 of its total potential returns per unit of risk. US18539UAD72 is currently generating about -0.12 per unit of volatility. If you would invest  8,865  in US18539UAD72 on November 29, 2024 and sell it today you would lose (762.00) from holding US18539UAD72 or give up 8.6% of portfolio value over 90 days.

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

Kite Realty Group  vs.  US18539UAD72

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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

US18539UAD72

Risk-Adjusted Performance

Very Weak

Over the last 90 days US18539UAD72 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US18539UAD72 investors.

Pair Trading with Kite Realty and 18539UAD7

The main advantage of trading using opposite Kite Realty and 18539UAD7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, 18539UAD7 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 18539UAD7 will offset losses from the drop in 18539UAD7's long position.

The idea behind Kite Realty Group and US18539UAD72 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.