Correlation Between BBB Foods and Kite Realty

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

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

Diversification Opportunities for BBB Foods and Kite Realty

0.38

Correlation Coefficient

BBB Foods  Kite Realty

Weak diversification

The 3 months correlation between BBB and Kite is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods 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 BBB Foods 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 BBB Foods 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 BBB Foods i.e., BBB Foods and Kite Realty go up and down completely randomly.

Pair Corralation between BBB Foods and Kite Realty

Given the investment horizon of 90 days BBB Foods is expected to under-perform the Kite Realty. In addition to that, BBB Foods is 3.01 times more volatile than Kite Realty Group. It trades about -0.13 of its total potential returns per unit of risk. Kite Realty Group is currently generating about 0.35 per unit of volatility. If you would invest  2,574  in Kite Realty Group on August 30, 2024 and sell it today you would earn a total of  206.00  from holding Kite Realty Group or generate 8.0% return on investment over 90 days.

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

BBB Foods  vs.  Kite Realty Group

BBB Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BBB Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kite Realty Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Kite Realty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with BBB Foods and Kite Realty

The main advantage of trading using opposite BBB Foods and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods 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 BBB Foods 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.