Correlation Between Kite Realty and W P

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

Diversification Opportunities for Kite Realty and W P

-0.73

Correlation Coefficient

Kite Realty  W P

Pay attention - limited upside

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

Pair Corralation between Kite Realty and W P

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the W P. In addition to that, Kite Realty is 1.28 times more volatile than W P Carey. It trades about -0.1 of its total potential returns per unit of risk. W P Carey is currently generating about 0.17 per unit of volatility. If you would invest  5,395  in W P Carey on December 26, 2024 and sell it today you would earn a total of  746.00  from holding W P Carey or generate 13.83% return on investment over 90 days.

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

Kite Realty Group  vs.  W P Carey

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

W P Carey

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in W P Carey are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, W P exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kite Realty and W P

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

The idea behind Kite Realty Group and W P Carey 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.