Correlation Between 404280CF4 and Kite Realty

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Can any of the company-specific risk be diversified away by investing in both 404280CF4 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 404280CF4 and Kite Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC HOLDINGS PLC and Kite Realty Group, you can compare the effects of market volatilities on 404280CF4 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 404280CF4 with a short position of Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of 404280CF4 and Kite Realty.

Diversification Opportunities for 404280CF4 and Kite Realty

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between 404280CF4 and Kite is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HSBC HOLDINGS PLC 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 404280CF4 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 HSBC HOLDINGS PLC 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 404280CF4 i.e., 404280CF4 and Kite Realty go up and down completely randomly.

Pair Corralation between 404280CF4 and Kite Realty

Assuming the 90 days trading horizon HSBC HOLDINGS PLC is expected to under-perform the Kite Realty. But the bond apears to be less risky and, when comparing its historical volatility, HSBC HOLDINGS PLC is 2.47 times less risky than Kite Realty. The bond trades about -0.09 of its potential returns per unit of risk. The Kite Realty Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  2,580  in Kite Realty Group on September 2, 2024 and sell it today you would earn a total of  177.00  from holding Kite Realty Group or generate 6.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

HSBC HOLDINGS PLC  vs.  Kite Realty Group

 Performance 
       Timeline  
HSBC HOLDINGS PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HSBC HOLDINGS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 404280CF4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Kite Realty Group 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Kite Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

404280CF4 and Kite Realty Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 404280CF4 and Kite Realty

The main advantage of trading using opposite 404280CF4 and Kite Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 404280CF4 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.
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The idea behind HSBC HOLDINGS PLC and Kite Realty Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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