Correlation Between Marcus Millichap and Kennedy Wilson

Can any of the company-specific risk be diversified away by investing in both Marcus Millichap and Kennedy Wilson 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 Marcus Millichap and Kennedy Wilson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marcus Millichap and Kennedy Wilson Holdings, you can compare the effects of market volatilities on Marcus Millichap and Kennedy Wilson 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 Marcus Millichap with a short position of Kennedy Wilson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus Millichap and Kennedy Wilson.

Diversification Opportunities for Marcus Millichap and Kennedy Wilson

0.81

Correlation Coefficient

Marcus Millichap  Kennedy Wilson

Very poor diversification

The 3 months correlation between Marcus and Kennedy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Kennedy Wilson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennedy Wilson Holdings and Marcus Millichap 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 Marcus Millichap are associated (or correlated) with Kennedy Wilson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennedy Wilson Holdings has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and Kennedy Wilson go up and down completely randomly.

Pair Corralation between Marcus Millichap and Kennedy Wilson

Considering the 90-day investment horizon Marcus Millichap is expected to generate 9.12 times less return on investment than Kennedy Wilson. But when comparing it to its historical volatility, Marcus Millichap is 1.38 times less risky than Kennedy Wilson. It trades about 0.01 of its potential returns per unit of risk. Kennedy Wilson Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  816.00  in Kennedy Wilson Holdings on January 25, 2024 and sell it today you would earn a total of  33.00  from holding Kennedy Wilson Holdings or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

Marcus Millichap  vs.  Kennedy Wilson Holdings

Marcus Millichap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Kennedy Wilson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Wilson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Marcus Millichap and Kennedy Wilson

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

The idea behind Marcus Millichap and Kennedy Wilson Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.