Correlation Between Kilroy Realty and TPG
Can any of the company-specific risk be diversified away by investing in both Kilroy Realty and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on Kilroy Realty and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilroy Realty and TPG.
Diversification Opportunities for Kilroy Realty and TPG
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kilroy and TPG is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kilroy Realty Corp and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Kilroy Realty i.e., Kilroy Realty and TPG go up and down completely randomly.
Pair Corralation between Kilroy Realty and TPG
Considering the 90-day investment horizon Kilroy Realty Corp is expected to under-perform the TPG. In addition to that, Kilroy Realty is 1.08 times more volatile than TPG Inc. It trades about -0.07 of its total potential returns per unit of risk. TPG Inc is currently generating about 0.14 per unit of volatility. If you would invest 6,389 in TPG Inc on October 23, 2024 and sell it today you would earn a total of 314.00 from holding TPG Inc or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kilroy Realty Corp vs. TPG Inc
Performance |
| Timeline |
| Kilroy Realty Corp |
| TPG Inc |
Kilroy Realty and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kilroy Realty and TPG
The main advantage of trading using opposite Kilroy Realty and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kilroy Realty position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG's long position.| Kilroy Realty vs. Hudson Pacific Properties | Kilroy Realty vs. Highwoods Properties | Kilroy Realty vs. Cousins Properties Incorporated | Kilroy Realty vs. Piedmont Office Realty |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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