Correlation Between MidCap Financial and Kite Realty
Can any of the company-specific risk be diversified away by investing in both MidCap Financial 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 MidCap Financial and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Kite Realty Group, you can compare the effects of market volatilities on MidCap Financial 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 MidCap Financial with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Kite Realty.
Diversification Opportunities for MidCap Financial and Kite Realty
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MidCap and Kite is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment 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 MidCap Financial 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 MidCap Financial Investment 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 MidCap Financial i.e., MidCap Financial and Kite Realty go up and down completely randomly.
Pair Corralation between MidCap Financial and Kite Realty
Assuming the 90 days horizon MidCap Financial is expected to generate 13.55 times less return on investment than Kite Realty. But when comparing it to its historical volatility, MidCap Financial Investment is 3.86 times less risky than Kite Realty. It trades about 0.1 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,582 in Kite Realty Group on August 29, 2024 and sell it today you would earn a total of 198.00 from holding Kite Realty Group or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Kite Realty Group
Performance |
| Timeline |
| MidCap Financial Inv |
| Kite Realty Group |
MidCap Financial and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Kite Realty
The main advantage of trading using opposite MidCap Financial and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial 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.| MidCap Financial vs. Visa Class A | MidCap Financial vs. Diamond Hill Investment | MidCap Financial vs. Distoken Acquisition | MidCap Financial vs. AllianceBernstein Holding LP |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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