Correlation Between Wheeler Real and Kimco Realty

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

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

Diversification Opportunities for Wheeler Real and Kimco Realty

-0.54

Correlation Coefficient

Wheeler Real  Kimco Realty

Excellent diversification

The 3 months correlation between Wheeler and Kimco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Wheeler Real 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 Wheeler Real Estate 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 Wheeler Real i.e., Wheeler Real and Kimco Realty go up and down completely randomly.

Pair Corralation between Wheeler Real and Kimco Realty

Assuming the 90 days horizon Wheeler Real Estate is expected to generate 4.69 times more return on investment than Kimco Realty. However, Wheeler Real is 4.69 times more volatile than Kimco Realty. It trades about 0.08 of its potential returns per unit of risk. Kimco Realty is currently generating about 0.0 per unit of risk. If you would invest  263.00  in Wheeler Real Estate on September 3, 2024 and sell it today you would earn a total of  48.00  from holding Wheeler Real Estate or generate 18.25% return on investment over 90 days.

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

Wheeler Real Estate  vs.  Kimco Realty

Wheeler Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wheeler Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wheeler Real reported 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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Wheeler Real and Kimco Realty

The main advantage of trading using opposite Wheeler Real and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheeler Real 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 Wheeler Real Estate 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.