Correlation Between Boston Beer and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Kite Realty Group, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Kite Realty.
Diversification Opportunities for Boston Beer and Kite Realty
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Kite is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Kite Realty go up and down completely randomly.
Pair Corralation between Boston Beer and Kite Realty
Considering the 90-day investment horizon Boston Beer is expected to generate 0.88 times more return on investment than Kite Realty. However, Boston Beer is 1.14 times less risky than Kite Realty. It trades about -0.25 of its potential returns per unit of risk. Kite Realty Group is currently generating about -0.22 per unit of risk. If you would invest 25,413 in Boston Beer on November 27, 2024 and sell it today you would lose (1,895) from holding Boston Beer or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Kite Realty Group
Performance |
| Timeline |
| Boston Beer |
| Kite Realty Group |
Boston Beer and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Kite Realty
The main advantage of trading using opposite Boston Beer and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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