Correlation Between Cars and Kimco Realty

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

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

Diversification Opportunities for Cars and Kimco Realty

0.65

Correlation Coefficient

Cars  Kimco Realty

Poor diversification

The 3 months correlation between Cars and Kimco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Cars 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 Cars Inc 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 Cars i.e., Cars and Kimco Realty go up and down completely randomly.

Pair Corralation between Cars and Kimco Realty

Assuming the 90 days horizon Cars Inc is expected to under-perform the Kimco Realty. In addition to that, Cars is 2.82 times more volatile than Kimco Realty. It trades about -0.13 of its total potential returns per unit of risk. Kimco Realty is currently generating about -0.13 per unit of volatility. If you would invest  2,194  in Kimco Realty on December 28, 2024 and sell it today you would lose (254.00) from holding Kimco Realty or give up 11.58% of portfolio value over 90 days.

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

Cars Inc  vs.  Kimco Realty

Cars Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cars Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 uncertain 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 Cars and Kimco Realty

The main advantage of trading using opposite Cars and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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 Cars Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.