Correlation Between Suntory Beverage and KIMCO

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

By analyzing existing cross correlation between Suntory Beverage Food and KIMCO RLTY P, you can compare the effects of market volatilities on Suntory Beverage and KIMCO 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 Suntory Beverage with a short position of KIMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and KIMCO.

Diversification Opportunities for Suntory Beverage and KIMCO

0.37

Correlation Coefficient

Suntory Beverage  KIMCO

Weak diversification

The 3 months correlation between Suntory and KIMCO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and KIMCO RLTY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMCO RLTY P and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with KIMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMCO RLTY P has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and KIMCO go up and down completely randomly.

Pair Corralation between Suntory Beverage and KIMCO

Assuming the 90 days horizon Suntory Beverage Food is expected to generate 4.63 times more return on investment than KIMCO. However, Suntory Beverage is 4.63 times more volatile than KIMCO RLTY P. It trades about 0.02 of its potential returns per unit of risk. KIMCO RLTY P is currently generating about 0.06 per unit of risk. If you would invest  1,518  in Suntory Beverage Food on October 5, 2024 and sell it today you would earn a total of  63.00  from holding Suntory Beverage Food or generate 4.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.26%
Values	Daily Returns

Suntory Beverage Food  vs.  KIMCO RLTY P

Suntory Beverage Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Suntory Beverage Food has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KIMCO RLTY P

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KIMCO RLTY P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KIMCO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Suntory Beverage and KIMCO

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

The idea behind Suntory Beverage Food and KIMCO RLTY P 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.