Correlation Between AGREE RLTY and Kimco Realty

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

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

Diversification Opportunities for AGREE RLTY and Kimco Realty

-0.34

Correlation Coefficient

AGREE RLTY  Kimco Realty

Very good diversification

The 3 months correlation between AGREE and Kimco is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding AGREE RLTY P and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and AGREE RLTY 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 AGREE RLTY P 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 AGREE RLTY i.e., AGREE RLTY and Kimco Realty go up and down completely randomly.

Pair Corralation between AGREE RLTY and Kimco Realty

Assuming the 90 days horizon AGREE RLTY P is expected to generate 0.74 times more return on investment than Kimco Realty. However, AGREE RLTY P is 1.35 times less risky than Kimco Realty. It trades about 0.1 of its potential returns per unit of risk. Kimco Realty is currently generating about -0.13 per unit of risk. If you would invest  6,600  in AGREE RLTY P on December 29, 2024 and sell it today you would earn a total of  416.00  from holding AGREE RLTY P or generate 6.3% return on investment over 90 days.

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

AGREE RLTY P  vs.  Kimco Realty

AGREE RLTY P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGREE RLTY P are ranked lower than 7 (%) 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 April 2025.

Kimco Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kimco Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AGREE RLTY and Kimco Realty

The main advantage of trading using opposite AGREE RLTY and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGREE RLTY 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 AGREE RLTY P 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.