Correlation Between Kennedy Wilson and American Assets

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

Diversification Opportunities for Kennedy Wilson and American Assets

0.49

Correlation Coefficient

Kennedy Wilson  American Assets

Very weak diversification

The 3 months correlation between Kennedy and American is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and American Assets Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Assets Trust 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 American Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Assets Trust has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and American Assets go up and down completely randomly.

Pair Corralation between Kennedy Wilson and American Assets

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 1.45 times more return on investment than American Assets. However, Kennedy Wilson is 1.45 times more volatile than American Assets Trust. It trades about 0.09 of its potential returns per unit of risk. American Assets Trust is currently generating about 0.03 per unit of risk. If you would invest  650.00  in Kennedy Wilson Holdings on May 7, 2025 and sell it today you would earn a total of  84.00  from holding Kennedy Wilson Holdings or generate 12.92% return on investment over 90 days.

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

Kennedy Wilson Holdings  vs.  American Assets Trust

Kennedy Wilson Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Kennedy Wilson showed solid returns over the last few months and may actually be approaching a breakup point.

American Assets Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Assets Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, American Assets is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kennedy Wilson and American Assets

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

The idea behind Kennedy Wilson Holdings and American Assets Trust 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.