Correlation Between Kite Realty and Alvarium Tiedemann

Can any of the company-specific risk be diversified away by investing in both Kite Realty and Alvarium Tiedemann 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 Kite Realty and Alvarium Tiedemann into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kite Realty Group and Alvarium Tiedemann Holdings, you can compare the effects of market volatilities on Kite Realty and Alvarium Tiedemann 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 Kite Realty with a short position of Alvarium Tiedemann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Alvarium Tiedemann.

Diversification Opportunities for Kite Realty and Alvarium Tiedemann

0.62

Correlation Coefficient

Kite Realty  Alvarium Tiedemann

Poor diversification

The 3 months correlation between Kite and Alvarium is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Alvarium Tiedemann Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvarium Tiedemann and Kite Realty 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 Kite Realty Group are associated (or correlated) with Alvarium Tiedemann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvarium Tiedemann has no effect on the direction of Kite Realty i.e., Kite Realty and Alvarium Tiedemann go up and down completely randomly.

Pair Corralation between Kite Realty and Alvarium Tiedemann

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Alvarium Tiedemann. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 2.82 times less risky than Alvarium Tiedemann. The stock trades about -0.03 of its potential returns per unit of risk. The Alvarium Tiedemann Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Alvarium Tiedemann Holdings on September 27, 2024 and sell it today you would earn a total of  50.00  from holding Alvarium Tiedemann Holdings or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Kite Realty Group  vs.  Alvarium Tiedemann Holdings

Kite Realty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kite Realty Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kite Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Alvarium Tiedemann

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alvarium Tiedemann Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Alvarium Tiedemann demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kite Realty and Alvarium Tiedemann

The main advantage of trading using opposite Kite Realty and Alvarium Tiedemann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty position performs unexpectedly, Alvarium Tiedemann 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 Alvarium Tiedemann will offset losses from the drop in Alvarium Tiedemann's long position.

The idea behind Kite Realty Group and Alvarium Tiedemann Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.