Correlation Between Lincoln Electric and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Lincoln Electric and Kite Realty 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 Lincoln Electric and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln Electric Holdings and Kite Realty Group, you can compare the effects of market volatilities on Lincoln Electric and Kite Realty 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 Lincoln Electric with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Electric and Kite Realty.
Diversification Opportunities for Lincoln Electric and Kite Realty
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lincoln and Kite is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Electric Holdings and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group and Lincoln Electric 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 Lincoln Electric Holdings are associated (or correlated) with Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Lincoln Electric i.e., Lincoln Electric and Kite Realty go up and down completely randomly.
Pair Corralation between Lincoln Electric and Kite Realty
Given the investment horizon of 90 days Lincoln Electric Holdings is expected to generate 2.44 times more return on investment than Kite Realty. However, Lincoln Electric is 2.44 times more volatile than Kite Realty Group. It trades about 0.19 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.36 per unit of risk. If you would invest 19,708 in Lincoln Electric Holdings on August 30, 2024 and sell it today you would earn a total of 1,954 from holding Lincoln Electric Holdings or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Electric Holdings vs. Kite Realty Group
Performance |
| Timeline |
| Lincoln Electric Holdings |
| Kite Realty Group |
Lincoln Electric and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Electric and Kite Realty
The main advantage of trading using opposite Lincoln Electric and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Electric position performs unexpectedly, Kite Realty 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 Kite Realty will offset losses from the drop in Kite Realty's long position.| Lincoln Electric vs. Kennametal | Lincoln Electric vs. Toro Co | Lincoln Electric vs. Snap On | Lincoln Electric vs. RBC Bearings Incorporated |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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