Correlation Between Kite Realty and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Lincoln 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 Lincoln 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 Lincoln Electric Holdings, you can compare the effects of market volatilities on Kite Realty and Lincoln 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 Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Lincoln Electric.
Diversification Opportunities for Kite Realty and Lincoln Electric
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kite and Lincoln is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Lincoln Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Electric Holdings 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 Lincoln Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Electric Holdings has no effect on the direction of Kite Realty i.e., Kite Realty and Lincoln Electric go up and down completely randomly.
Pair Corralation between Kite Realty and Lincoln Electric
Considering the 90-day investment horizon Kite Realty is expected to generate 1.26 times less return on investment than Lincoln Electric. But when comparing it to its historical volatility, Kite Realty Group is 2.44 times less risky than Lincoln Electric. It trades about 0.36 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 19,708 in Lincoln Electric Holdings on August 30, 2024 and sell it today you would earn a total of 1,954 from holding Lincoln Electric Holdings or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Lincoln Electric Holdings
Performance |
| Timeline |
| Kite Realty Group |
| Lincoln Electric Holdings |
Kite Realty and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Lincoln Electric
The main advantage of trading using opposite Kite Realty and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Lincoln 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 Lincoln Electric will offset losses from the drop in Lincoln Electric's long position.| Kite Realty vs. Saul Centers | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Site Centers Corp | Kite Realty vs. Acadia Realty Trust |
| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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