Correlation Between Pool and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Pool 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 Pool and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and Kite Realty Group, you can compare the effects of market volatilities on Pool 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 Pool with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and Kite Realty.
Diversification Opportunities for Pool and Kite Realty
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pool and Kite is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. 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 Pool 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 Pool Corporation 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 Pool i.e., Pool and Kite Realty go up and down completely randomly.
Pair Corralation between Pool and Kite Realty
Given the investment horizon of 90 days Pool Corporation is expected to generate 2.14 times more return on investment than Kite Realty. However, Pool is 2.14 times more volatile than Kite Realty Group. It trades about 0.09 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.17 per unit of risk. If you would invest 34,950 in Pool Corporation on August 24, 2024 and sell it today you would earn a total of 1,486 from holding Pool Corporation or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pool Corp. vs. Kite Realty Group
Performance |
| Timeline |
| Pool |
| Kite Realty Group |
Pool and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and Kite Realty
The main advantage of trading using opposite Pool and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool 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.The idea behind Pool Corporation and Kite Realty Group 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.| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets |