Correlation Between Vicinity Centres and Kimco Realty

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

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

Diversification Opportunities for Vicinity Centres and Kimco Realty

-0.57

Correlation Coefficient

Vicinity Centres  Kimco Realty

Excellent diversification

The 3 months correlation between Vicinity and Kimco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Vicinity Centres 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 Vicinity Centres 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 Vicinity Centres i.e., Vicinity Centres and Kimco Realty go up and down completely randomly.

Pair Corralation between Vicinity Centres and Kimco Realty

Assuming the 90 days horizon Vicinity Centres is expected to under-perform the Kimco Realty. In addition to that, Vicinity Centres is 1.11 times more volatile than Kimco Realty. It trades about -0.01 of its total potential returns per unit of risk. Kimco Realty is currently generating about 0.2 per unit of volatility. If you would invest  2,076  in Kimco Realty on August 31, 2024 and sell it today you would earn a total of  324.00  from holding Kimco Realty or generate 15.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Vicinity Centres  vs.  Kimco Realty

Vicinity Centres

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vicinity Centres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vicinity Centres is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kimco Realty

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kimco Realty are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kimco Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vicinity Centres and Kimco Realty

The main advantage of trading using opposite Vicinity Centres and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity Centres 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 Vicinity Centres 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.