Correlation Between Kennedy Wilson and America Great

Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and America Great 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 Kennedy Wilson and America Great into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kennedy Wilson Holdings and America Great Health, you can compare the effects of market volatilities on Kennedy Wilson and America Great 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 Kennedy Wilson with a short position of America Great. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and America Great.

Diversification Opportunities for Kennedy Wilson and America Great

-0.19

Correlation Coefficient

Kennedy Wilson  America Great

Good diversification

The 3 months correlation between Kennedy and America is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and America Great Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Great Health and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with America Great. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Great Health has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and America Great go up and down completely randomly.

Pair Corralation between Kennedy Wilson and America Great

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.12 times more return on investment than America Great. However, Kennedy Wilson Holdings is 8.0 times less risky than America Great. It trades about -0.05 of its potential returns per unit of risk. America Great Health is currently generating about -0.2 per unit of risk. If you would invest  1,084  in Kennedy Wilson Holdings on September 23, 2024 and sell it today you would lose (79.00) from holding Kennedy Wilson Holdings or give up 7.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Kennedy Wilson Holdings  vs.  America Great Health

Kennedy Wilson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Wilson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kennedy Wilson is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

America Great Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Great Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kennedy Wilson and America Great

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

The idea behind Kennedy Wilson Holdings and America Great Health 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.