Correlation Between EPR Properties and Kimco Realty

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

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

Diversification Opportunities for EPR Properties and Kimco Realty

0.15

Correlation Coefficient

EPR Properties  Kimco Realty

Average diversification

The 3 months correlation between EPR and Kimco is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and EPR Properties 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 EPR Properties 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 EPR Properties i.e., EPR Properties and Kimco Realty go up and down completely randomly.

Pair Corralation between EPR Properties and Kimco Realty

Assuming the 90 days trading horizon EPR Properties is expected to generate 1.4 times more return on investment than Kimco Realty. However, EPR Properties is 1.4 times more volatile than Kimco Realty. It trades about 0.05 of its potential returns per unit of risk. Kimco Realty is currently generating about 0.05 per unit of risk. If you would invest  2,004  in EPR Properties on December 28, 2024 and sell it today you would earn a total of  62.00  from holding EPR Properties or generate 3.09% return on investment over 90 days.

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

EPR Properties  vs.  Kimco Realty

EPR Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EPR Properties are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, EPR Properties 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

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kimco Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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 EPR Properties and Kimco Realty

The main advantage of trading using opposite EPR Properties and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties 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 EPR Properties 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.