Correlation Between Kimco Realty and AGREE RLTY

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

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

Diversification Opportunities for Kimco Realty and AGREE RLTY

0.94

Correlation Coefficient

Kimco Realty  AGREE RLTY

Almost no diversification

The 3 months correlation between Kimco and AGREE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and AGREE RLTY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGREE RLTY P and Kimco 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 Kimco Realty are associated (or correlated) with AGREE RLTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGREE RLTY P has no effect on the direction of Kimco Realty i.e., Kimco Realty and AGREE RLTY go up and down completely randomly.

Pair Corralation between Kimco Realty and AGREE RLTY

Assuming the 90 days horizon Kimco Realty is expected to generate 0.55 times more return on investment than AGREE RLTY. However, Kimco Realty is 1.81 times less risky than AGREE RLTY. It trades about 0.61 of its potential returns per unit of risk. AGREE RLTY P is currently generating about 0.22 per unit of risk. If you would invest  2,180  in Kimco Realty on September 2, 2024 and sell it today you would earn a total of  240.00  from holding Kimco Realty or generate 11.01% return on investment over 90 days.

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

Kimco Realty  vs.  AGREE RLTY P

Kimco Realty

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kimco Realty are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Kimco Realty reported solid returns over the last few months and may actually be approaching a breakup point.

AGREE RLTY P

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGREE RLTY P are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGREE RLTY may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kimco Realty and AGREE RLTY

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

The idea behind Kimco Realty and AGREE 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.