Correlation Between Fast Retailing and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Fast Retailing 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 Fast Retailing and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Kite Realty Group, you can compare the effects of market volatilities on Fast Retailing 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 Fast Retailing with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Kite Realty.
Diversification Opportunities for Fast Retailing and Kite Realty
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and Kite is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co 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 Fast Retailing 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 Fast Retailing Co 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 Fast Retailing i.e., Fast Retailing and Kite Realty go up and down completely randomly.
Pair Corralation between Fast Retailing and Kite Realty
Assuming the 90 days horizon Fast Retailing Co is expected to under-perform the Kite Realty. In addition to that, Fast Retailing is 1.21 times more volatile than Kite Realty Group. It trades about -0.11 of its total potential returns per unit of risk. Kite Realty Group is currently generating about 0.25 per unit of volatility. If you would invest 2,604 in Kite Realty Group on August 31, 2024 and sell it today you would earn a total of 153.00 from holding Kite Realty Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fast Retailing Co vs. Kite Realty Group
Performance |
| Timeline |
| Fast Retailing |
| Kite Realty Group |
Fast Retailing and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Kite Realty
The main advantage of trading using opposite Fast Retailing and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing 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.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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