Correlation Between Kite Realty and Wheeler Real

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

Diversification Opportunities for Kite Realty and Wheeler Real

-0.43

Correlation Coefficient

Kite Realty  Wheeler Real

Very good diversification

The 3 months correlation between Kite and Wheeler is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Wheeler Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheeler Real Estate 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 Wheeler Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheeler Real Estate has no effect on the direction of Kite Realty i.e., Kite Realty and Wheeler Real go up and down completely randomly.

Pair Corralation between Kite Realty and Wheeler Real

Considering the 90-day investment horizon Kite Realty is expected to generate 65.15 times less return on investment than Wheeler Real. But when comparing it to its historical volatility, Kite Realty Group is 45.06 times less risky than Wheeler Real. It trades about 0.08 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  618.00  in Wheeler Real Estate on September 4, 2024 and sell it today you would earn a total of  142.00  from holding Wheeler Real Estate or generate 22.98% return on investment over 90 days.

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

Kite Realty Group  vs.  Wheeler Real Estate

Kite Realty Group

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Wheeler Real Estate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wheeler Real Estate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Wheeler Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kite Realty and Wheeler Real

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

The idea behind Kite Realty Group and Wheeler Real Estate 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 Commodity Directory module to find actively traded commodities issued by global exchanges.