Correlation Between Small Cap and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Premium and Kite Realty Group, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Kite Realty.
Diversification Opportunities for Small Cap and Kite Realty
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and Kite is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium 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 Small Cap 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 Small Cap Premium 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 Small Cap i.e., Small Cap and Kite Realty go up and down completely randomly.
Pair Corralation between Small Cap and Kite Realty
Considering the 90-day investment horizon Small Cap is expected to generate 5.18 times less return on investment than Kite Realty. But when comparing it to its historical volatility, Small Cap Premium is 2.79 times less risky than Kite Realty. It trades about 0.08 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,026 in Kite Realty Group on September 3, 2024 and sell it today you would earn a total of 731.00 from holding Kite Realty Group or generate 36.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Premium vs. Kite Realty Group
Performance |
| Timeline |
| Small Cap Premium |
| Kite Realty Group |
Small Cap and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Kite Realty
The main advantage of trading using opposite Small Cap and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. First Trust Enhanced | Small Cap vs. Ready Capital |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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