Correlation Between HP and KIMCO

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

By analyzing existing cross correlation between HP Inc and KIMCO RLTY P, you can compare the effects of market volatilities on HP and KIMCO 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 HP with a short position of KIMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and KIMCO.

Diversification Opportunities for HP and KIMCO

0.61

Correlation Coefficient

HP  KIMCO

Poor diversification

The 3 months correlation between HP and KIMCO is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and KIMCO RLTY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMCO RLTY P and HP 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 HP Inc are associated (or correlated) with KIMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMCO RLTY P has no effect on the direction of HP i.e., HP and KIMCO go up and down completely randomly.

Pair Corralation between HP and KIMCO

Considering the 90-day investment horizon HP Inc is expected to generate 1.04 times more return on investment than KIMCO. However, HP is 1.04 times more volatile than KIMCO RLTY P. It trades about 0.05 of its potential returns per unit of risk. KIMCO RLTY P is currently generating about -0.18 per unit of risk. If you would invest  3,599  in HP Inc on September 4, 2024 and sell it today you would earn a total of  80.00  from holding HP Inc or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	47.62%
Values	Daily Returns

HP Inc  vs.  KIMCO RLTY P

HP Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

KIMCO RLTY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMCO RLTY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for KIMCO RLTY P investors.

Pair Trading with HP and KIMCO

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

The idea behind HP Inc and KIMCO RLTY P 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.