Correlation Between Kimco Realty and Acadia Realty

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

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

Diversification Opportunities for Kimco Realty and Acadia Realty

0.78

Correlation Coefficient

Kimco Realty  Acadia Realty

Poor diversification

The 3 months correlation between Kimco and Acadia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Kimco Realty i.e., Kimco Realty and Acadia Realty go up and down completely randomly.

Pair Corralation between Kimco Realty and Acadia Realty

Considering the 90-day investment horizon Kimco Realty is expected to generate 0.88 times more return on investment than Acadia Realty. However, Kimco Realty is 1.14 times less risky than Acadia Realty. It trades about -0.09 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.11 per unit of risk. If you would invest  2,296  in Kimco Realty on December 28, 2024 and sell it today you would lose (195.00) from holding Kimco Realty or give up 8.49% of portfolio value over 90 days.

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

Kimco Realty  vs.  Acadia Realty Trust

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. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Acadia Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acadia Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kimco Realty and Acadia Realty

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

The idea behind Kimco Realty and Acadia Realty Trust 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.