Correlation Between Pinterest and Kite Realty

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

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

Diversification Opportunities for Pinterest and Kite Realty

-0.43

Correlation Coefficient

Pinterest  Kite Realty

Very good diversification

The 3 months correlation between Pinterest and Kite is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group and Pinterest 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 Pinterest are associated (or correlated) with Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Pinterest i.e., Pinterest and Kite Realty go up and down completely randomly.

Pair Corralation between Pinterest and Kite Realty

Given the investment horizon of 90 days Pinterest is expected to generate 2.16 times more return on investment than Kite Realty. However, Pinterest is 2.16 times more volatile than Kite Realty Group. It trades about 0.08 of its potential returns per unit of risk. Kite Realty Group is currently generating about -0.09 per unit of risk. If you would invest  2,992  in Pinterest on December 25, 2024 and sell it today you would earn a total of  475.00  from holding Pinterest or generate 15.88% return on investment over 90 days.

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

Pinterest  vs.  Kite Realty Group

Pinterest

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Pinterest and Kite Realty

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

The idea behind Pinterest and Kite Realty 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.