Correlation Between Universal Health and Kennedy Wilson
Can any of the company-specific risk be diversified away by investing in both Universal Health and Kennedy Wilson 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 Universal Health and Kennedy Wilson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and Kennedy Wilson Holdings, you can compare the effects of market volatilities on Universal Health and Kennedy Wilson 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 Universal Health with a short position of Kennedy Wilson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Kennedy Wilson.
Diversification Opportunities for Universal Health and Kennedy Wilson
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Universal and Kennedy is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Kennedy Wilson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennedy Wilson Holdings and Universal Health 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 Universal Health Realty are associated (or correlated) with Kennedy Wilson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennedy Wilson Holdings has no effect on the direction of Universal Health i.e., Universal Health and Kennedy Wilson go up and down completely randomly.
Pair Corralation between Universal Health and Kennedy Wilson
Considering the 90-day investment horizon Universal Health Realty is expected to generate 0.8 times more return on investment than Kennedy Wilson. However, Universal Health Realty is 1.25 times less risky than Kennedy Wilson. It trades about -0.23 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about -0.21 per unit of risk. If you would invest 4,018 in Universal Health Realty on September 25, 2024 and sell it today you would lose (301.00) from holding Universal Health Realty or give up 7.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Kennedy Wilson Holdings
Performance |
| Timeline |
| Universal Health Realty |
| Kennedy Wilson Holdings |
Universal Health and Kennedy Wilson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Kennedy Wilson
The main advantage of trading using opposite Universal Health and Kennedy Wilson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Kennedy Wilson 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 Kennedy Wilson will offset losses from the drop in Kennedy Wilson's long position.| Universal Health vs. Healthcare Realty Trust | Universal Health vs. Healthpeak Properties | Universal Health vs. Sabra Healthcare REIT | Universal Health vs. Community Healthcare Trust |
| Kennedy Wilson vs. Frp Holdings Ord | Kennedy Wilson vs. Transcontinental Realty Investors | Kennedy Wilson vs. J W Mays | Kennedy Wilson vs. Anywhere Real Estate |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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