Correlation Between Digi International and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Kite Realty Group, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Kite Realty.
Diversification Opportunities for Digi International and Kite Realty
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digi and Kite is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Digi International 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 Digi International 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 Digi International 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 Digi International i.e., Digi International and Kite Realty go up and down completely randomly.
Pair Corralation between Digi International and Kite Realty
Given the investment horizon of 90 days Digi International is expected to generate 2.24 times more return on investment than Kite Realty. However, Digi International is 2.24 times more volatile than Kite Realty Group. It trades about 0.06 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 2,384 in Digi International on September 2, 2024 and sell it today you would earn a total of 938.00 from holding Digi International or generate 39.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Kite Realty Group
Performance |
| Timeline |
| Digi International |
| Kite Realty Group |
Digi International and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Kite Realty
The main advantage of trading using opposite Digi International and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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