Correlation Between Kite Realty and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Kite Realty and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Kite Realty and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Zoom Video.
Diversification Opportunities for Kite Realty and Zoom Video
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kite and Zoom is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Kite Realty i.e., Kite Realty and Zoom Video go up and down completely randomly.
Pair Corralation between Kite Realty and Zoom Video
Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 3.25 times less risky than Zoom Video. The stock trades about -0.2 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,632 in Zoom Video Communications on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Zoom Video Communications or generate 0.31% 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. Zoom Video Communications
Performance |
| Timeline |
| Kite Realty Group |
| Zoom Video Communications |
Kite Realty and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Zoom Video
The main advantage of trading using opposite Kite Realty and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video'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 |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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