Correlation Between Kite Realty and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Olympic Steel 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 Olympic Steel 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 Olympic Steel, you can compare the effects of market volatilities on Kite Realty and Olympic Steel 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 Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Olympic Steel.
Diversification Opportunities for Kite Realty and Olympic Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kite and Olympic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel 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 Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of Kite Realty i.e., Kite Realty and Olympic Steel go up and down completely randomly.
Pair Corralation between Kite Realty and Olympic Steel
Considering the 90-day investment horizon Kite Realty Group is expected to generate 0.43 times more return on investment than Olympic Steel. However, Kite Realty Group is 2.31 times less risky than Olympic Steel. It trades about 0.2 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.05 per unit of risk. If you would invest 2,053 in Kite Realty Group on August 25, 2024 and sell it today you would earn a total of 687.00 from holding Kite Realty Group or generate 33.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Olympic Steel
Performance |
| Timeline |
| Kite Realty Group |
| Olympic Steel |
Kite Realty and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Olympic Steel
The main advantage of trading using opposite Kite Realty and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel's long position.| Kite Realty vs. Site Centers Corp | Kite Realty vs. Inventrust Properties Corp | Kite Realty vs. Retail Opportunity Investments | Kite Realty vs. Netstreit Corp |
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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