Correlation Between Kennedy Wilson and Re Max

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

Diversification Opportunities for Kennedy Wilson and Re Max

0.85

Correlation Coefficient

Kennedy Wilson  Re Max

Very poor diversification

The 3 months correlation between Kennedy and RMAX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding 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 Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Re Max go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Re Max

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.74 times more return on investment than Re Max. However, Kennedy Wilson Holdings is 1.34 times less risky than Re Max. It trades about -0.01 of its potential returns per unit of risk. Re Max Holding is currently generating about -0.03 per unit of risk. If you would invest  1,105  in Kennedy Wilson Holdings on August 1, 2024 and sell it today you would lose (6.00) from holding Kennedy Wilson Holdings or give up 0.54% of portfolio value over 90 days.

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

Kennedy Wilson Holdings  vs.  Re Max Holding

Kennedy Wilson Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 5 (%) 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 November 2024.

Re Max Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Re Max Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Re Max showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kennedy Wilson and Re Max

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

The idea behind Kennedy Wilson Holdings and Re Max Holding 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 Stocks Directory module to find actively traded stocks across global markets.