Correlation Between Kilroy Realty and City Office
Can any of the company-specific risk be diversified away by investing in both Kilroy Realty and City Office 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 Kilroy Realty and City Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kilroy Realty Corp and City Office REIT, you can compare the effects of market volatilities on Kilroy Realty and City Office 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 Kilroy Realty with a short position of City Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilroy Realty and City Office.
Diversification Opportunities for Kilroy Realty and City Office
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kilroy and City is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and City Office REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office REIT and Kilroy Realty 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 Kilroy Realty Corp are associated (or correlated) with City Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Office REIT has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and City Office go up and down completely randomly.
Pair Corralation between Kilroy Realty and City Office
Considering the 90-day investment horizon Kilroy Realty is expected to generate 2.57 times less return on investment than City Office. In addition to that, Kilroy Realty is 1.17 times more volatile than City Office REIT. It trades about 0.14 of its total potential returns per unit of risk. City Office REIT is currently generating about 0.42 per unit of volatility. If you would invest 1,750 in City Office REIT on September 4, 2024 and sell it today you would earn a total of 227.00 from holding City Office REIT or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kilroy Realty Corp vs. City Office REIT
Performance |
| Timeline |
| Kilroy Realty Corp |
| City Office REIT |
Kilroy Realty and City Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kilroy Realty and City Office
The main advantage of trading using opposite Kilroy Realty and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kilroy Realty position performs unexpectedly, City Office 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 City Office will offset losses from the drop in City Office's long position.| Kilroy Realty vs. Boston Properties | Kilroy Realty vs. Douglas Emmett | Kilroy Realty vs. Alexandria Real Estate | Kilroy Realty vs. Vornado Realty Trust |
| City Office vs. Vornado Realty Trust | City Office vs. Vornado Realty Trust | City Office vs. SL Green Realty | City Office vs. Hudson Pacific Properties |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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