Correlation Between Kennedy Wilson and Innovative Industrial

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

Diversification Opportunities for Kennedy Wilson and Innovative Industrial

-0.32

Correlation Coefficient

Kennedy Wilson  Innovative Industrial

Very good diversification

The 3 months correlation between Kennedy and Innovative is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial 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 Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Innovative Industrial go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Innovative Industrial

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.85 times more return on investment than Innovative Industrial. However, Kennedy Wilson Holdings is 1.17 times less risky than Innovative Industrial. It trades about 0.06 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about -0.07 per unit of risk. If you would invest  1,089  in Kennedy Wilson Holdings on September 4, 2024 and sell it today you would earn a total of  70.00  from holding Kennedy Wilson Holdings or generate 6.43% 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.  Innovative Industrial Properti

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.

Innovative Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innovative Industrial Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kennedy Wilson and Innovative Industrial

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

The idea behind Kennedy Wilson Holdings and Innovative Industrial Properties 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..