Correlation Between Empire State and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Kilroy Realty Corp, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Kilroy Realty.
Diversification Opportunities for Empire State and Kilroy Realty
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Kilroy is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty 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 Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Kilroy Realty go up and down completely randomly.
Pair Corralation between Empire State and Kilroy Realty
Given the investment horizon of 90 days Empire State Realty is expected to generate 22.97 times more return on investment than Kilroy Realty. However, Empire State is 22.97 times more volatile than Kilroy Realty Corp. It trades about 0.05 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.06 per unit of risk. If you would invest 684.00 in Empire State Realty on August 31, 2024 and sell it today you would earn a total of 427.00 from holding Empire State Realty or generate 62.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.25% |
| Values | Daily Returns |
Empire State Realty vs. Kilroy Realty Corp
Performance |
| Timeline |
| Empire State Realty |
| Kilroy Realty Corp |
Empire State and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Kilroy Realty
The main advantage of trading using opposite Empire State and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Empire State Realty | Empire State vs. City Office | Empire State vs. Cousins Properties Incorporated | Empire State vs. Postal Realty Trust |
| Kilroy Realty vs. Hudson Pacific Properties | Kilroy Realty vs. Highwoods Properties | Kilroy Realty vs. Cousins Properties Incorporated | Kilroy Realty vs. Piedmont Office Realty |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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