Correlation Between Highlight Communications and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Kilroy 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 Highlight Communications and Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Kilroy Realty Corp, you can compare the effects of market volatilities on Highlight Communications and Kilroy 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 Highlight Communications with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Kilroy Realty.
Diversification Opportunities for Highlight Communications and Kilroy Realty
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highlight and Kilroy is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of Highlight Communications i.e., Highlight Communications and Kilroy Realty go up and down completely randomly.
Pair Corralation between Highlight Communications and Kilroy Realty
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.53 times more return on investment than Kilroy Realty. However, Highlight Communications is 1.53 times more volatile than Kilroy Realty Corp. It trades about 0.07 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about -0.03 per unit of risk. If you would invest 107.00 in Highlight Communications AG on September 25, 2024 and sell it today you would earn a total of 4.00 from holding Highlight Communications AG or generate 3.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Highlight Communications AG vs. Kilroy Realty Corp
Performance |
Timeline |
Highlight Communications |
Kilroy Realty Corp |
Highlight Communications and Kilroy Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highlight Communications and Kilroy Realty
The main advantage of trading using opposite Highlight Communications and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Kilroy 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. ViacomCBS |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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