Correlation Between Diamondrock Hospitality and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both Diamondrock Hospitality and Kilroy Realty 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 Diamondrock Hospitality and Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamondrock Hospitality and Kilroy Realty Corp, you can compare the effects of market volatilities on Diamondrock Hospitality and Kilroy Realty 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 Diamondrock Hospitality with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamondrock Hospitality and Kilroy Realty.
Diversification Opportunities for Diamondrock Hospitality and Kilroy Realty
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Diamondrock and Kilroy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Diamondrock Hospitality and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp and Diamondrock Hospitality 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 Diamondrock Hospitality are associated (or correlated) with Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of Diamondrock Hospitality i.e., Diamondrock Hospitality and Kilroy Realty go up and down completely randomly.
Pair Corralation between Diamondrock Hospitality and Kilroy Realty
Considering the 90-day investment horizon Diamondrock Hospitality is expected to generate 1.31 times more return on investment than Kilroy Realty. However, Diamondrock Hospitality is 1.31 times more volatile than Kilroy Realty Corp. It trades about 0.04 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.04 per unit of risk. If you would invest 851.00 in Diamondrock Hospitality on August 27, 2025 and sell it today you would earn a total of 33.00 from holding Diamondrock Hospitality or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamondrock Hospitality vs. Kilroy Realty Corp
Performance |
| Timeline |
| Diamondrock Hospitality |
| Kilroy Realty Corp |
Diamondrock Hospitality and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamondrock Hospitality and Kilroy Realty
The main advantage of trading using opposite Diamondrock Hospitality and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamondrock Hospitality position performs unexpectedly, Kilroy Realty 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.| Diamondrock Hospitality vs. Broadstone Net Lease | Diamondrock Hospitality vs. The Tinley Beverage | Diamondrock Hospitality vs. Nascent Wine | Diamondrock Hospitality vs. Monster Beverage Corp |
| Kilroy Realty vs. Casio Computer Co | Kilroy Realty vs. Australian Agricultural | Kilroy Realty vs. NETCLASS TECHNOLOGY INC | Kilroy Realty vs. Rheon Automatic Machinery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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