Correlation Between Kite Realty and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Tanger Factory 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 Tanger Factory 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 Tanger Factory Outlet, you can compare the effects of market volatilities on Kite Realty and Tanger Factory 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 Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Tanger Factory.
Diversification Opportunities for Kite Realty and Tanger Factory
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kite and Tanger is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet 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 Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of Kite Realty i.e., Kite Realty and Tanger Factory go up and down completely randomly.
Pair Corralation between Kite Realty and Tanger Factory
Considering the 90-day investment horizon Kite Realty is expected to generate 1.67 times less return on investment than Tanger Factory. But when comparing it to its historical volatility, Kite Realty Group is 1.06 times less risky than Tanger Factory. It trades about 0.07 of its potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,064 in Tanger Factory Outlet on August 31, 2024 and sell it today you would earn a total of 1,633 from holding Tanger Factory Outlet or generate 79.12% 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. Tanger Factory Outlet
Performance |
| Timeline |
| Kite Realty Group |
| Tanger Factory Outlet |
Kite Realty and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Tanger Factory
The main advantage of trading using opposite Kite Realty and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory'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 |
| Tanger Factory vs. Federal Realty Investment | Tanger Factory vs. Macerich Company | Tanger Factory vs. National Retail Properties | Tanger Factory vs. Kimco Realty |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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