Correlation Between Kite Realty and Juniata Valley

Can any of the company-specific risk be diversified away by investing in both Kite Realty and Juniata Valley 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 Juniata Valley 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 Juniata Valley Financial, you can compare the effects of market volatilities on Kite Realty and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Juniata Valley.

Diversification Opportunities for Kite Realty and Juniata Valley

0.24

Correlation Coefficient

Kite Realty  Juniata Valley

Modest diversification

The 3 months correlation between Kite and Juniata is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Kite Realty i.e., Kite Realty and Juniata Valley go up and down completely randomly.

Pair Corralation between Kite Realty and Juniata Valley

Considering the 90-day investment horizon Kite Realty is expected to generate 1.47 times less return on investment than Juniata Valley. But when comparing it to its historical volatility, Kite Realty Group is 1.99 times less risky than Juniata Valley. It trades about 0.1 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,095  in Juniata Valley Financial on September 29, 2024 and sell it today you would earn a total of  220.00  from holding Juniata Valley Financial or generate 20.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kite Realty Group  vs.  Juniata Valley Financial

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.

Juniata Valley Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kite Realty and Juniata Valley

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

The idea behind Kite Realty Group and Juniata Valley Financial 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.