Correlation Between Cedar Realty and Kimco Realty

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

By analyzing existing cross correlation between Cedar Realty Trust and Kimco Realty, you can compare the effects of market volatilities on Cedar Realty and Kimco 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 Cedar Realty with a short position of Kimco Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Kimco Realty.

Diversification Opportunities for Cedar Realty and Kimco Realty

-0.12

Correlation Coefficient

Cedar Realty  Kimco Realty

Good diversification

The 3 months correlation between Cedar and Kimco is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Cedar Realty 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 Cedar Realty Trust are associated (or correlated) with Kimco Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimco Realty has no effect on the direction of Cedar Realty i.e., Cedar Realty and Kimco Realty go up and down completely randomly.

Pair Corralation between Cedar Realty and Kimco Realty

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 3.21 times more return on investment than Kimco Realty. However, Cedar Realty is 3.21 times more volatile than Kimco Realty. It trades about 0.11 of its potential returns per unit of risk. Kimco Realty is currently generating about -0.05 per unit of risk. If you would invest  1,367  in Cedar Realty Trust on September 5, 2024 and sell it today you would earn a total of  243.00  from holding Cedar Realty Trust or generate 17.78% return on investment over 90 days.

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

Cedar Realty Trust  vs.  Kimco Realty

Cedar Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cedar Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

Kimco Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimco Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Kimco Realty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cedar Realty and Kimco Realty

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

The idea behind Cedar Realty Trust and Kimco Realty 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.