Correlation Between Kimco Realty and Regency Centers

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

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

Diversification Opportunities for Kimco Realty and Regency Centers

0.0

Correlation Coefficient

Kimco Realty  Regency Centers

Pay attention - limited upside

The 3 months correlation between Kimco and Regency is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers 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 Regency Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Centers has no effect on the direction of Kimco Realty i.e., Kimco Realty and Regency Centers go up and down completely randomly.

Pair Corralation between Kimco Realty and Regency Centers

Assuming the 90 days trading horizon Kimco Realty is expected to generate 0.7 times more return on investment than Regency Centers. However, Kimco Realty is 1.42 times less risky than Regency Centers. It trades about 0.05 of its potential returns per unit of risk. Regency Centers is currently generating about 0.01 per unit of risk. If you would invest  2,072  in Kimco Realty on December 29, 2024 and sell it today you would earn a total of  48.00  from holding Kimco Realty or generate 2.32% return on investment over 90 days.

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

Kimco Realty  vs.  Regency Centers

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.

Regency Centers

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kimco Realty and Regency Centers

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

The idea behind Kimco Realty and Regency Centers 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.