Correlation Between Kite Realty and Stepstone
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Kite Realty and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Stepstone.
Diversification Opportunities for Kite Realty and Stepstone
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kite and Stepstone is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Kite Realty i.e., Kite Realty and Stepstone go up and down completely randomly.
Pair Corralation between Kite Realty and Stepstone
Considering the 90-day investment horizon Kite Realty is expected to generate 1.74 times less return on investment than Stepstone. But when comparing it to its historical volatility, Kite Realty Group is 2.86 times less risky than Stepstone. It trades about 0.22 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,192 in Stepstone Group on August 25, 2024 and sell it today you would earn a total of 513.00 from holding Stepstone Group or generate 8.28% 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. Stepstone Group
Performance |
| Timeline |
| Kite Realty Group |
| Stepstone Group |
Kite Realty and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Stepstone
The main advantage of trading using opposite Kite Realty and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone'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 |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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