Correlation Between Kite Realty and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Boston Beer 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 Boston Beer 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 Boston Beer, you can compare the effects of market volatilities on Kite Realty and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Boston Beer.
Diversification Opportunities for Kite Realty and Boston Beer
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kite and Boston is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Kite Realty i.e., Kite Realty and Boston Beer go up and down completely randomly.
Pair Corralation between Kite Realty and Boston Beer
Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Boston Beer. In addition to that, Kite Realty is 1.14 times more volatile than Boston Beer. It trades about -0.22 of its total potential returns per unit of risk. Boston Beer is currently generating about -0.25 per unit of volatility. If you would invest 25,413 in Boston Beer on November 27, 2024 and sell it today you would lose (1,895) from holding Boston Beer or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Boston Beer
Performance |
| Timeline |
| Kite Realty Group |
| Boston Beer |
Kite Realty and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Boston Beer
The main advantage of trading using opposite Kite Realty and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer'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 |
| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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