Correlation Between Air Lease and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Kite Realty Group, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Kite Realty.
Diversification Opportunities for Air Lease and Kite Realty
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Kite is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease 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 Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Kite Realty go up and down completely randomly.
Pair Corralation between Air Lease and Kite Realty
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.54 times more return on investment than Kite Realty. However, Air Lease is 1.54 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 0.09 per unit of risk. If you would invest 3,860 in Air Lease on September 2, 2024 and sell it today you would earn a total of 1,230 from holding Air Lease or generate 31.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Kite Realty Group
Performance |
| Timeline |
| Air Lease |
| Kite Realty Group |
Air Lease and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Kite Realty
The main advantage of trading using opposite Air Lease and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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