Correlation Between Kennedy Wilson and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Ready Capital 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 Kennedy Wilson and Ready Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kennedy Wilson Holdings and Ready Capital Corp, you can compare the effects of market volatilities on Kennedy Wilson and Ready Capital 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 Kennedy Wilson with a short position of Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Ready Capital.
Diversification Opportunities for Kennedy Wilson and Ready Capital
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kennedy and Ready is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Ready Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital Corp and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital Corp has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Ready Capital go up and down completely randomly.
Pair Corralation between Kennedy Wilson and Ready Capital
Allowing for the 90-day total investment horizon Kennedy Wilson is expected to generate 1.88 times less return on investment than Ready Capital. In addition to that, Kennedy Wilson is 1.4 times more volatile than Ready Capital Corp. It trades about 0.07 of its total potential returns per unit of risk. Ready Capital Corp is currently generating about 0.19 per unit of volatility. If you would invest 691.00 in Ready Capital Corp on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Ready Capital Corp or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kennedy Wilson Holdings vs. Ready Capital Corp
Performance |
| Timeline |
| Kennedy Wilson Holdings |
| Ready Capital Corp |
Kennedy Wilson and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kennedy Wilson and Ready Capital
The main advantage of trading using opposite Kennedy Wilson and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kennedy Wilson position performs unexpectedly, Ready Capital 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 Ready Capital will offset losses from the drop in Ready Capital's long position.The idea behind Kennedy Wilson Holdings and Ready Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Dynex Capital | Ready Capital vs. Orchid Island Capital |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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