Correlation Between Kite Realty and Site Centers

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

Diversification Opportunities for Kite Realty and Site Centers

0.27

Correlation Coefficient

Kite Realty  Site Centers

Modest diversification

The 3 months correlation between Kite and Site is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers Corp 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 Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of Kite Realty i.e., Kite Realty and Site Centers go up and down completely randomly.

Pair Corralation between Kite Realty and Site Centers

Considering the 90-day investment horizon Kite Realty is expected to generate 3.86 times less return on investment than Site Centers. But when comparing it to its historical volatility, Kite Realty Group is 6.02 times less risky than Site Centers. It trades about 0.16 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,203  in Site Centers Corp on August 15, 2024 and sell it today you would earn a total of  417.00  from holding Site Centers Corp or generate 34.66% return on investment over 90 days.

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

Kite Realty Group  vs.  Site Centers Corp

Kite Realty Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Kite Realty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Site Centers Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Site Centers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kite Realty and Site Centers

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

The idea behind Kite Realty Group and Site Centers Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.