Correlation Between AUTO TRADER and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both AUTO TRADER and Kilroy 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 AUTO TRADER and Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUTO TRADER ADR and Kilroy Realty Corp, you can compare the effects of market volatilities on AUTO TRADER and Kilroy 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 AUTO TRADER with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTO TRADER and Kilroy Realty.
Diversification Opportunities for AUTO TRADER and Kilroy Realty
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUTO and Kilroy is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AUTO TRADER ADR and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp and AUTO TRADER 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 AUTO TRADER ADR are associated (or correlated) with Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of AUTO TRADER i.e., AUTO TRADER and Kilroy Realty go up and down completely randomly.
Pair Corralation between AUTO TRADER and Kilroy Realty
Assuming the 90 days trading horizon AUTO TRADER ADR is expected to generate 0.53 times more return on investment than Kilroy Realty. However, AUTO TRADER ADR is 1.87 times less risky than Kilroy Realty. It trades about 0.29 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.13 per unit of risk. If you would invest 232.00 in AUTO TRADER ADR on September 14, 2024 and sell it today you would earn a total of 14.00 from holding AUTO TRADER ADR or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTO TRADER ADR vs. Kilroy Realty Corp
Performance |
| Timeline |
| AUTO TRADER ADR |
| Kilroy Realty Corp |
AUTO TRADER and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTO TRADER and Kilroy Realty
The main advantage of trading using opposite AUTO TRADER and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTO TRADER position performs unexpectedly, Kilroy 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.| AUTO TRADER vs. Australian Agricultural | AUTO TRADER vs. H FARM SPA | AUTO TRADER vs. Dairy Farm International | AUTO TRADER vs. Tower One Wireless |
| Kilroy Realty vs. Solstad Offshore ASA | Kilroy Realty vs. SENECA FOODS A | Kilroy Realty vs. CARSALESCOM | Kilroy Realty vs. Food Life Companies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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