Correlation Between KIMCO and Skyline

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

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

Diversification Opportunities for KIMCO and Skyline

0.36

Correlation Coefficient

KIMCO  Skyline

Weak diversification

The 3 months correlation between KIMCO and Skyline is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KIMCO RLTY P and Skyline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyline and KIMCO 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 RLTY P are associated (or correlated) with Skyline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyline has no effect on the direction of KIMCO i.e., KIMCO and Skyline go up and down completely randomly.

Pair Corralation between KIMCO and Skyline

Assuming the 90 days trading horizon KIMCO RLTY P is expected to generate 0.04 times more return on investment than Skyline. However, KIMCO RLTY P is 22.4 times less risky than Skyline. It trades about 0.02 of its potential returns per unit of risk. Skyline is currently generating about -0.28 per unit of risk. If you would invest  9,692  in KIMCO RLTY P on October 5, 2024 and sell it today you would earn a total of  3.00  from holding KIMCO RLTY P or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

KIMCO RLTY P  vs.  Skyline

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.

Skyline

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with KIMCO and Skyline

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

The idea behind KIMCO RLTY P and Skyline 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 Anywhere module to track or share privately all of your investments from the convenience of any device.