Correlation Between Kimco Realty and Range Resources

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

By analyzing existing cross correlation between Kimco Realty and Range Resources Corp, you can compare the effects of market volatilities on Kimco Realty and Range Resources 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 Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimco Realty and Range Resources.

Diversification Opportunities for Kimco Realty and Range Resources

0.39

Correlation Coefficient

Kimco Realty  Range Resources

Weak diversification

The 3 months correlation between Kimco and Range is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Range Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Range Resources Corp 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 Range Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Range Resources Corp has no effect on the direction of Kimco Realty i.e., Kimco Realty and Range Resources go up and down completely randomly.

Pair Corralation between Kimco Realty and Range Resources

Assuming the 90 days horizon Kimco Realty is expected to under-perform the Range Resources. In addition to that, Kimco Realty is 1.09 times more volatile than Range Resources Corp. It trades about -0.13 of its total potential returns per unit of risk. Range Resources Corp is currently generating about -0.03 per unit of volatility. If you would invest  6,933  in Range Resources Corp on December 29, 2024 and sell it today you would lose (233.00) from holding Range Resources Corp or give up 3.36% of portfolio value over 90 days.

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

Kimco Realty  vs.  Range Resources Corp

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 weak 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.

Range Resources Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kimco Realty and Range Resources

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

The idea behind Kimco Realty and Range Resources Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.