Correlation Between Kennedy Wilson and Alpine Realty

Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Alpine Realty 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 Kennedy Wilson and Alpine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kennedy Wilson Holdings and Alpine Realty Income, you can compare the effects of market volatilities on Kennedy Wilson and Alpine Realty 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 Kennedy Wilson with a short position of Alpine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Alpine Realty.

Diversification Opportunities for Kennedy Wilson and Alpine Realty

0.86

Correlation Coefficient

Kennedy Wilson  Alpine Realty

Very poor diversification

The 3 months correlation between Kennedy and Alpine is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Alpine Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Realty Income and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with Alpine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Realty Income has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Alpine Realty go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Alpine Realty

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.85 times more return on investment than Alpine Realty. However, Kennedy Wilson Holdings is 1.18 times less risky than Alpine Realty. It trades about -0.32 of its potential returns per unit of risk. Alpine Realty Income is currently generating about -0.35 per unit of risk. If you would invest  1,120  in Kennedy Wilson Holdings on October 8, 2024 and sell it today you would lose (115.00) from holding Kennedy Wilson Holdings or give up 10.27% of portfolio value over 90 days.

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

Kennedy Wilson Holdings  vs.  Alpine Realty Income

Kennedy Wilson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Wilson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kennedy Wilson is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Alpine Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Realty Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Kennedy Wilson and Alpine Realty

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

The idea behind Kennedy Wilson Holdings and Alpine Realty Income 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.