Correlation Between Kimco Realty and Firm Capital

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

By analyzing existing cross correlation between Kimco Realty and Firm Capital Property, you can compare the effects of market volatilities on Kimco Realty and Firm Capital 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 Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimco Realty and Firm Capital.

Diversification Opportunities for Kimco Realty and Firm Capital

0.13

Correlation Coefficient

Kimco Realty  Firm Capital

Average diversification

The 3 months correlation between Kimco and Firm is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Firm Capital Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Property 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 Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Property has no effect on the direction of Kimco Realty i.e., Kimco Realty and Firm Capital go up and down completely randomly.

Pair Corralation between Kimco Realty and Firm Capital

Assuming the 90 days trading horizon Kimco Realty is expected to under-perform the Firm Capital. But the preferred stock apears to be less risky and, when comparing its historical volatility, Kimco Realty is 1.76 times less risky than Firm Capital. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Firm Capital Property is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Firm Capital Property on September 5, 2024 and sell it today you would earn a total of  30.00  from holding Firm Capital Property or generate 7.89% return on investment over 90 days.

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

Kimco Realty  vs.  Firm Capital Property

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.

Firm Capital Property

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Property are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Firm Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kimco Realty and Firm Capital

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

The idea behind Kimco Realty and Firm Capital Property 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..