Correlation Between Weyco and Kite Realty

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

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

Diversification Opportunities for Weyco and Kite Realty

0.78

Correlation Coefficient

Weyco  Kite Realty

Poor diversification

The 3 months correlation between Weyco and Kite is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group 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 Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Kite Realty go up and down completely randomly.

Pair Corralation between Weyco and Kite Realty

Given the investment horizon of 90 days Weyco Group is expected to generate 5.26 times more return on investment than Kite Realty. However, Weyco is 5.26 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 0.08 per unit of risk. If you would invest  3,359  in Weyco Group on September 5, 2024 and sell it today you would earn a total of  206.00  from holding Weyco Group or generate 6.13% return on investment over 90 days.

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

Weyco Group  vs.  Kite Realty Group

Weyco Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Weyco may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kite Realty Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Kite Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Weyco and Kite Realty

The main advantage of trading using opposite Weyco and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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 Weyco Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.