Correlation Between Kimco Realty and Alexanders

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

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

Diversification Opportunities for Kimco Realty and Alexanders

0.65

Correlation Coefficient

Kimco Realty  Alexanders

Poor diversification

The 3 months correlation between Kimco and Alexanders is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Alexanders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexanders 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 Alexanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexanders has no effect on the direction of Kimco Realty i.e., Kimco Realty and Alexanders go up and down completely randomly.

Pair Corralation between Kimco Realty and Alexanders

Considering the 90-day investment horizon Kimco Realty is expected to under-perform the Alexanders. But the stock apears to be less risky and, when comparing its historical volatility, Kimco Realty is 1.28 times less risky than Alexanders. The stock trades about -0.11 of its potential returns per unit of risk. The Alexanders is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  18,744  in Alexanders on December 1, 2024 and sell it today you would earn a total of  2,690  from holding Alexanders or generate 14.35% return on investment over 90 days.

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

Kimco Realty  vs.  Alexanders

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.

Alexanders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alexanders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Alexanders is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kimco Realty and Alexanders

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

The idea behind Kimco Realty and Alexanders 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 Transaction History module to view history of all your transactions and understand their impact on performance.