Correlation Between Kimco Realty and Agree Realty

Can any of the company-specific risk be diversified away by investing in both Kimco Realty and Agree 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 Kimco Realty and Agree Realty 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 Realty, you can compare the effects of market volatilities on Kimco Realty and Agree 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 Kimco Realty with a short position of Agree Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimco Realty and Agree Realty.

Diversification Opportunities for Kimco Realty and Agree Realty

0.38

Correlation Coefficient

Kimco Realty  Agree Realty

Weak diversification

The 3 months correlation between Kimco and Agree is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree Realty 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 Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of Kimco Realty i.e., Kimco Realty and Agree Realty go up and down completely randomly.

Pair Corralation between Kimco Realty and Agree Realty

Considering the 90-day investment horizon Kimco Realty is expected to generate 1.7 times less return on investment than Agree Realty. In addition to that, Kimco Realty is 1.35 times more volatile than Agree Realty. It trades about 0.08 of its total potential returns per unit of risk. Agree Realty is currently generating about 0.18 per unit of volatility. If you would invest  5,599  in Agree Realty on February 4, 2024 and sell it today you would earn a total of  279.00  from holding Agree Realty or generate 4.98% return on investment over 90 days.

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

Kimco Realty  vs.  Agree Realty

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 forward indicators, Kimco Realty is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Agree Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Agree Realty is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kimco Realty and Agree Realty

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

The idea behind Kimco Realty and Agree 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.