Correlation Between Kite Realty and Weyco

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

Diversification Opportunities for Kite Realty and Weyco

0.73

Correlation Coefficient

Kite Realty  Weyco

Poor diversification

The 3 months correlation between Kite and Weyco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Kite Realty i.e., Kite Realty and Weyco go up and down completely randomly.

Pair Corralation between Kite Realty and Weyco

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Weyco. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 3.13 times less risky than Weyco. The stock trades about -0.01 of its potential returns per unit of risk. The Weyco Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,340  in Weyco Group on September 13, 2024 and sell it today you would earn a total of  21.00  from holding Weyco Group or generate 0.63% return on investment over 90 days.

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

Kite Realty Group  vs.  Weyco Group

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.

Weyco Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Weyco is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kite Realty and Weyco

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

The idea behind Kite Realty Group and Weyco Group 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.