Correlation Between Kite Realty and Four Corners
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Four Corners 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 Four Corners 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 Four Corners Property, you can compare the effects of market volatilities on Kite Realty and Four Corners 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 Four Corners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Four Corners.
Diversification Opportunities for Kite Realty and Four Corners
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kite and Four is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Four Corners Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Corners Property 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 Four Corners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Corners Property has no effect on the direction of Kite Realty i.e., Kite Realty and Four Corners go up and down completely randomly.
Pair Corralation between Kite Realty and Four Corners
Considering the 90-day investment horizon Kite Realty Group is expected to generate 1.18 times more return on investment than Four Corners. However, Kite Realty is 1.18 times more volatile than Four Corners Property. It trades about 0.3 of its potential returns per unit of risk. Four Corners Property is currently generating about 0.19 per unit of risk. If you would invest 2,567 in Kite Realty Group on August 26, 2024 and sell it today you would earn a total of 173.00 from holding Kite Realty Group or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Four Corners Property
Performance |
| Timeline |
| Kite Realty Group |
| Four Corners Property |
Kite Realty and Four Corners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Four Corners
The main advantage of trading using opposite Kite Realty and Four Corners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Four Corners 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 Four Corners will offset losses from the drop in Four Corners' long position.The idea behind Kite Realty Group and Four Corners Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Four Corners vs. Broadstone Net Lease | Four Corners vs. Armada Hflr Pr | Four Corners vs. Brightspire Capital | Four Corners vs. Safehold |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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