Correlation Between Kimco Realty and CBL Associates

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

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

Diversification Opportunities for Kimco Realty and CBL Associates

0.11

Correlation Coefficient

Kimco Realty  CBL Associates

Average diversification

The 3 months correlation between Kimco and CBL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties 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 CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Kimco Realty i.e., Kimco Realty and CBL Associates go up and down completely randomly.

Pair Corralation between Kimco Realty and CBL Associates

Considering the 90-day investment horizon Kimco Realty is expected to under-perform the CBL Associates. But the stock apears to be less risky and, when comparing its historical volatility, Kimco Realty is 1.25 times less risky than CBL Associates. The stock trades about -0.1 of its potential returns per unit of risk. The CBL Associates Properties is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,898  in CBL Associates Properties on December 26, 2024 and sell it today you would lose (220.00) from holding CBL Associates Properties or give up 7.59% of portfolio value over 90 days.

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

Kimco Realty  vs.  CBL Associates Properties

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.

CBL Associates Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBL Associates Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Kimco Realty and CBL Associates

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

The idea behind Kimco Realty and CBL Associates Properties 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.