Correlation Between Kennedy Wilson and Baron Real

Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Baron 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 Kennedy Wilson and Baron Real 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 Baron Real Estate, you can compare the effects of market volatilities on Kennedy Wilson and Baron 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 Kennedy Wilson with a short position of Baron Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Baron Real.

Diversification Opportunities for Kennedy Wilson and Baron Real

0.64

Correlation Coefficient

Kennedy Wilson  Baron Real

Poor diversification

The 3 months correlation between Kennedy and Baron is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate 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 Baron Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Baron Real go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Baron Real

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to under-perform the Baron Real. In addition to that, Kennedy Wilson is 1.57 times more volatile than Baron Real Estate. It trades about -0.38 of its total potential returns per unit of risk. Baron Real Estate is currently generating about -0.23 per unit of volatility. If you would invest  1,778  in Baron Real Estate on September 28, 2024 and sell it today you would lose (96.00) from holding Baron Real Estate or give up 5.4% of portfolio value over 90 days.

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

Kennedy Wilson Holdings  vs.  Baron Real Estate

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 latest inconsistent performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Baron Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Real Estate are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Baron Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kennedy Wilson and Baron Real

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

The idea behind Kennedy Wilson Holdings and Baron 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.