Correlation Between Kennedy Wilson and Fathom Holdings

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

Diversification Opportunities for Kennedy Wilson and Fathom Holdings

-0.34

Correlation Coefficient

Kennedy Wilson  Fathom Holdings

Very good diversification

The 3 months correlation between Kennedy and Fathom is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Fathom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Holdings 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 Fathom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Holdings has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Fathom Holdings go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Fathom Holdings

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.47 times more return on investment than Fathom Holdings. However, Kennedy Wilson Holdings is 2.12 times less risky than Fathom Holdings. It trades about 0.09 of its potential returns per unit of risk. Fathom Holdings is currently generating about -0.14 per unit of risk. If you would invest  1,087  in Kennedy Wilson Holdings on September 4, 2024 and sell it today you would earn a total of  72.00  from holding Kennedy Wilson Holdings or generate 6.62% return on investment over 90 days.

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

Kennedy Wilson Holdings  vs.  Fathom Holdings

Kennedy Wilson Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Kennedy Wilson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fathom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kennedy Wilson and Fathom Holdings

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

The idea behind Kennedy Wilson Holdings and Fathom Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.