Correlation Between Simpson Manufacturing and Kite Realty
Can any of the company-specific risk be diversified away by investing in both Simpson Manufacturing 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 Simpson Manufacturing and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simpson Manufacturing and Kite Realty Group, you can compare the effects of market volatilities on Simpson Manufacturing 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 Simpson Manufacturing with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simpson Manufacturing and Kite Realty.
Diversification Opportunities for Simpson Manufacturing and Kite Realty
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Simpson and Kite is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing 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 Simpson Manufacturing 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 Simpson Manufacturing 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 Simpson Manufacturing i.e., Simpson Manufacturing and Kite Realty go up and down completely randomly.
Pair Corralation between Simpson Manufacturing and Kite Realty
Considering the 90-day investment horizon Simpson Manufacturing is expected to generate 1.29 times more return on investment than Kite Realty. However, Simpson Manufacturing is 1.29 times more volatile than Kite Realty Group. It trades about 0.08 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.05 per unit of risk. If you would invest 9,343 in Simpson Manufacturing on September 4, 2024 and sell it today you would earn a total of 9,240 from holding Simpson Manufacturing or generate 98.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simpson Manufacturing vs. Kite Realty Group
Performance |
| Timeline |
| Simpson Manufacturing |
| Kite Realty Group |
Simpson Manufacturing and Kite Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simpson Manufacturing and Kite Realty
The main advantage of trading using opposite Simpson Manufacturing and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simpson Manufacturing 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.| Simpson Manufacturing vs. West Fraser Timber | Simpson Manufacturing vs. Interfor | Simpson Manufacturing vs. Ufp Industries | Simpson Manufacturing vs. Canfor |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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