Correlation Between First Industrial and Kite Realty
Can any of the company-specific risk be diversified away by investing in both First Industrial 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 First Industrial and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Industrial Realty and Kite Realty Group, you can compare the effects of market volatilities on First Industrial 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 First Industrial with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Kite Realty.
Diversification Opportunities for First Industrial and Kite Realty
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Kite is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty 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 First Industrial 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 First Industrial Realty 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 First Industrial i.e., First Industrial and Kite Realty go up and down completely randomly.
Pair Corralation between First Industrial and Kite Realty
Allowing for the 90-day total investment horizon First Industrial Realty is expected to under-perform the Kite Realty. But the stock apears to be less risky and, when comparing its historical volatility, First Industrial Realty is 1.04 times less risky than Kite Realty. The stock trades about -0.17 of its potential returns per unit of risk. The Kite Realty Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,613 in Kite Realty Group on August 23, 2024 and sell it today you would earn a total of 103.00 from holding Kite Realty Group or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Kite Realty Group
Performance |
| Timeline |
| First Industrial Realty |
| Kite Realty Group |
First Industrial and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Kite Realty
The main advantage of trading using opposite First Industrial and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial 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.| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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