Correlation Between Kennedy Wilson and Rafael Holdings

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

Diversification Opportunities for Kennedy Wilson and Rafael Holdings

-0.11

Correlation Coefficient

Kennedy Wilson  Rafael Holdings

Good diversification

The 3 months correlation between Kennedy and Rafael is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Rafael Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Holdings Class 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 Rafael Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafael Holdings Class has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Rafael Holdings go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Rafael Holdings

Allowing for the 90-day total investment horizon Kennedy Wilson is expected to generate 4.63 times less return on investment than Rafael Holdings. But when comparing it to its historical volatility, Kennedy Wilson Holdings is 1.77 times less risky than Rafael Holdings. It trades about 0.04 of its potential returns per unit of risk. Rafael Holdings Class is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Rafael Holdings Class on September 12, 2024 and sell it today you would earn a total of  33.00  from holding Rafael Holdings Class or generate 21.57% return on investment over 90 days.

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

Kennedy Wilson Holdings  vs.  Rafael Holdings Class

Kennedy Wilson Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Rafael Holdings Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rafael Holdings Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rafael Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kennedy Wilson and Rafael Holdings

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

The idea behind Kennedy Wilson Holdings and Rafael Holdings Class 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.