Correlation Between KIMCO and Townsquare Media

Can any of the company-specific risk be diversified away by investing in both KIMCO and Townsquare Media 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 Townsquare Media 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 Townsquare Media, you can compare the effects of market volatilities on KIMCO and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMCO and Townsquare Media.

Diversification Opportunities for KIMCO and Townsquare Media

-0.25

Correlation Coefficient

KIMCO  Townsquare Media

Very good diversification

The 3 months correlation between KIMCO and Townsquare is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding KIMCO RLTY P and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of KIMCO i.e., KIMCO and Townsquare Media go up and down completely randomly.

Pair Corralation between KIMCO and Townsquare Media

Assuming the 90 days trading horizon KIMCO RLTY P is expected to generate 0.15 times more return on investment than Townsquare Media. However, KIMCO RLTY P is 6.81 times less risky than Townsquare Media. It trades about -0.11 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.06 per unit of risk. If you would invest  9,662  in KIMCO RLTY P on October 25, 2024 and sell it today you would lose (180.00) from holding KIMCO RLTY P or give up 1.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

KIMCO RLTY P  vs.  Townsquare Media

KIMCO RLTY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMCO RLTY P has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Townsquare Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators 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 and Townsquare Media

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

The idea behind KIMCO RLTY P and Townsquare Media 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.