Correlation Between Kite Realty and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Emerson Electric 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 Kite Realty and Emerson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kite Realty Group and Emerson Electric, you can compare the effects of market volatilities on Kite Realty and Emerson Electric 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 Kite Realty with a short position of Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Emerson Electric.
Diversification Opportunities for Kite Realty and Emerson Electric
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kite and Emerson is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric and Kite 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 Kite Realty Group are associated (or correlated) with Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Kite Realty i.e., Kite Realty and Emerson Electric go up and down completely randomly.
Pair Corralation between Kite Realty and Emerson Electric
Considering the 90-day investment horizon Kite Realty is expected to generate 1.42 times less return on investment than Emerson Electric. But when comparing it to its historical volatility, Kite Realty Group is 1.1 times less risky than Emerson Electric. It trades about 0.07 of its potential returns per unit of risk. Emerson Electric is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,158 in Emerson Electric on August 31, 2024 and sell it today you would earn a total of 5,102 from holding Emerson Electric or generate 62.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Emerson Electric
Performance |
| Timeline |
| Kite Realty Group |
| Emerson Electric |
Kite Realty and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Emerson Electric
The main advantage of trading using opposite Kite Realty and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |