Correlation Between Kite Realty and John Wiley

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

Diversification Opportunities for Kite Realty and John Wiley

0.25

Correlation Coefficient

Kite Realty  John Wiley

Modest diversification

The 3 months correlation between Kite and John is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons 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 John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of Kite Realty i.e., Kite Realty and John Wiley go up and down completely randomly.

Pair Corralation between Kite Realty and John Wiley

Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the John Wiley. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 1.49 times less risky than John Wiley. The stock trades about -0.07 of its potential returns per unit of risk. The John Wiley Sons is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  4,643  in John Wiley Sons on September 20, 2024 and sell it today you would lose (212.00) from holding John Wiley Sons or give up 4.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.0%
Values	Daily Returns

Kite Realty Group  vs.  John Wiley Sons

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.

John Wiley Sons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Wiley Sons has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, John Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kite Realty and John Wiley

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

The idea behind Kite Realty Group and John Wiley Sons 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.