Correlation Between Power REIT and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Power REIT 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 Power REIT and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Kite Realty Group, you can compare the effects of market volatilities on Power REIT 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 Power REIT with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Kite Realty.
Diversification Opportunities for Power REIT and Kite Realty
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Kite is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT 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 Power REIT 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 Power REIT 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 Power REIT i.e., Power REIT and Kite Realty go up and down completely randomly.
Pair Corralation between Power REIT and Kite Realty
Allowing for the 90-day total investment horizon Power REIT is expected to generate 9.1 times more return on investment than Kite Realty. However, Power REIT is 9.1 times more volatile than Kite Realty Group. It trades about 0.07 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.1 per unit of risk. If you would invest 61.00 in Power REIT on August 26, 2024 and sell it today you would earn a total of 46.00 from holding Power REIT or generate 75.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Kite Realty Group
Performance |
| Timeline |
| Power REIT |
| Kite Realty Group |
Power REIT and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Kite Realty
The main advantage of trading using opposite Power REIT and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT 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.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
| Kite Realty vs. Site Centers Corp | Kite Realty vs. Inventrust Properties Corp | Kite Realty vs. Retail Opportunity Investments | Kite Realty vs. Netstreit Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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