Correlation Between Kennedy Wilson and Bridgemarq Real

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

Diversification Opportunities for Kennedy Wilson and Bridgemarq Real

0.74

Correlation Coefficient

Kennedy Wilson  Bridgemarq Real

Poor diversification

The 3 months correlation between Kennedy and Bridgemarq is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Bridgemarq Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgemarq 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 Bridgemarq Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgemarq Real Estate has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Bridgemarq Real go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Bridgemarq Real

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to under-perform the Bridgemarq Real. But the stock apears to be less risky and, when comparing its historical volatility, Kennedy Wilson Holdings is 2.66 times less risky than Bridgemarq Real. The stock trades about -0.02 of its potential returns per unit of risk. The Bridgemarq Real Estate is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  827.00  in Bridgemarq Real Estate on August 2, 2024 and sell it today you would earn a total of  257.00  from holding Bridgemarq Real Estate or generate 31.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.33%
Values	Daily Returns

Kennedy Wilson Holdings  vs.  Bridgemarq Real Estate

Kennedy Wilson Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 6 (%) 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 December 2024.

Bridgemarq Real Estate

Risk-Adjusted Performance

27 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgemarq Real Estate are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Bridgemarq Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kennedy Wilson and Bridgemarq Real

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

The idea behind Kennedy Wilson Holdings and Bridgemarq 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.