Correlation Between Kennedy Wilson and One Liberty

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

Diversification Opportunities for Kennedy Wilson and One Liberty

0.97

Correlation Coefficient

Kennedy Wilson  One Liberty

Almost no diversification

The 3 months correlation between Kennedy and One is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and One Liberty go up and down completely randomly.

Pair Corralation between Kennedy Wilson and One Liberty

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to under-perform the One Liberty. In addition to that, Kennedy Wilson is 1.45 times more volatile than One Liberty Properties. It trades about -0.18 of its total potential returns per unit of risk. One Liberty Properties is currently generating about -0.15 per unit of volatility. If you would invest  2,958  in One Liberty Properties on November 28, 2024 and sell it today you would lose (324.00) from holding One Liberty Properties or give up 10.95% of portfolio value over 90 days.

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

Kennedy Wilson Holdings  vs.  One Liberty Properties

Kennedy Wilson Holdings

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

One Liberty Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Liberty Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kennedy Wilson and One Liberty

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

The idea behind Kennedy Wilson Holdings and One Liberty Properties 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.

Check out your portfolio center.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.