Correlation Between Visa and KIMCO

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

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

Diversification Opportunities for Visa and KIMCO

-0.34

Correlation Coefficient

Visa  KIMCO

Very good diversification

The 3 months correlation between Visa and KIMCO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and KIMCO go up and down completely randomly.

Pair Corralation between Visa and KIMCO

Taking into account the 90-day investment horizon Visa Class A is expected to generate 8.23 times more return on investment than KIMCO. However, Visa is 8.23 times more volatile than KIMCO RLTY P. It trades about 0.12 of its potential returns per unit of risk. KIMCO RLTY P is currently generating about 0.01 per unit of risk. If you would invest  31,319  in Visa Class A on September 25, 2024 and sell it today you would earn a total of  746.00  from holding Visa Class A or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Visa Class A  vs.  KIMCO RLTY P

Visa Class A

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Visa and KIMCO

The main advantage of trading using opposite Visa and KIMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.