Correlation Between Rithm Property and Kite Realty

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

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

Diversification Opportunities for Rithm Property and Kite Realty

0.04

Correlation Coefficient

Rithm Property  Kite Realty

Significant diversification

The 3 months correlation between Rithm and Kite is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Property Trust 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 Rithm Property 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 Rithm Property Trust 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 Rithm Property i.e., Rithm Property and Kite Realty go up and down completely randomly.

Pair Corralation between Rithm Property and Kite Realty

Considering the 90-day investment horizon Rithm Property Trust is expected to generate 1.62 times more return on investment than Kite Realty. However, Rithm Property is 1.62 times more volatile than Kite Realty Group. It trades about 0.07 of its potential returns per unit of risk. Kite Realty Group is currently generating about -0.2 per unit of risk. If you would invest  294.00  in Rithm Property Trust on November 21, 2024 and sell it today you would earn a total of  25.00  from holding Rithm Property Trust or generate 8.5% return on investment over 90 days.

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

Rithm Property Trust  vs.  Kite Realty Group

Rithm Property Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rithm Property Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Rithm Property may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Rithm Property and Kite Realty

The main advantage of trading using opposite Rithm Property and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Property 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 Rithm Property Trust 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.