Correlation Between Kilroy Realty and KBS Real
Can any of the company-specific risk be diversified away by investing in both Kilroy Realty and KBS Real 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 KBS Real 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 KBS Real Estate, you can compare the effects of market volatilities on Kilroy Realty and KBS Real 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 KBS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilroy Realty and KBS Real.
Diversification Opportunities for Kilroy Realty and KBS Real
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kilroy and KBS is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and KBS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBS Real Estate 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 KBS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBS Real Estate has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and KBS Real go up and down completely randomly.
Pair Corralation between Kilroy Realty and KBS Real
Considering the 90-day investment horizon Kilroy Realty Corp is expected to generate 0.35 times more return on investment than KBS Real. However, Kilroy Realty Corp is 2.88 times less risky than KBS Real. It trades about 0.12 of its potential returns per unit of risk. KBS Real Estate is currently generating about 0.01 per unit of risk. If you would invest 3,174 in Kilroy Realty Corp on September 3, 2024 and sell it today you would earn a total of 937.00 from holding Kilroy Realty Corp or generate 29.52% 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. KBS Real Estate
Performance |
| Timeline |
| Kilroy Realty Corp |
| KBS Real Estate |
Kilroy Realty and KBS Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kilroy Realty and KBS Real
The main advantage of trading using opposite Kilroy Realty and KBS Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kilroy Realty position performs unexpectedly, KBS Real 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 KBS Real will offset losses from the drop in KBS Real's long position.| Kilroy Realty vs. Office Properties Income | Kilroy Realty vs. SL Green Realty | Kilroy Realty vs. Highwoods Properties | Kilroy Realty vs. Equity Commonwealth |
| KBS Real vs. Cousins Properties Incorporated | KBS Real vs. Highwoods Properties | KBS Real vs. Douglas Emmett | KBS Real vs. Equity Commonwealth |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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