Correlation Between Kite Realty and Timken
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Timken 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 Timken 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 Timken Company, you can compare the effects of market volatilities on Kite Realty and Timken 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 Timken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Timken.
Diversification Opportunities for Kite Realty and Timken
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kite and Timken is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Timken Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timken Company 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 Timken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timken Company has no effect on the direction of Kite Realty i.e., Kite Realty and Timken go up and down completely randomly.
Pair Corralation between Kite Realty and Timken
Considering the 90-day investment horizon Kite Realty Group is expected to generate 0.28 times more return on investment than Timken. However, Kite Realty Group is 3.6 times less risky than Timken. It trades about 0.36 of its potential returns per unit of risk. Timken Company is currently generating about -0.09 per unit of risk. If you would invest 2,574 in Kite Realty Group on August 30, 2024 and sell it today you would earn a total of 211.00 from holding Kite Realty Group or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Timken Company
Performance |
| Timeline |
| Kite Realty Group |
| Timken Company |
Kite Realty and Timken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Timken
The main advantage of trading using opposite Kite Realty and Timken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Timken 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 Timken will offset losses from the drop in Timken'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 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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