Correlation Between American Healthcare and Kimco Realty
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Kimco Realty 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 American Healthcare and Kimco Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Kimco Realty, you can compare the effects of market volatilities on American Healthcare and Kimco Realty 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 American Healthcare with a short position of Kimco Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Kimco Realty.
Diversification Opportunities for American Healthcare and Kimco Realty
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Kimco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Kimco Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimco Realty has no effect on the direction of American Healthcare i.e., American Healthcare and Kimco Realty go up and down completely randomly.
Pair Corralation between American Healthcare and Kimco Realty
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 2.23 times more return on investment than Kimco Realty. However, American Healthcare is 2.23 times more volatile than Kimco Realty. It trades about 0.26 of its potential returns per unit of risk. Kimco Realty is currently generating about 0.42 per unit of risk. If you would invest 2,636 in American Healthcare REIT, on August 30, 2024 and sell it today you would earn a total of 321.00 from holding American Healthcare REIT, or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Kimco Realty
Performance |
| Timeline |
| American Healthcare REIT, |
| Kimco Realty |
American Healthcare and Kimco Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Kimco Realty
The main advantage of trading using opposite American Healthcare and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Kimco Realty 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 Realty will offset losses from the drop in Kimco Realty's long position.| American Healthcare vs. Healthcare Realty Trust | American Healthcare vs. Sabra Healthcare REIT | American Healthcare vs. National Health Investors | American Healthcare vs. Global Medical REIT |
| Kimco Realty vs. Saul Centers | Kimco Realty vs. Brixmor Property | Kimco Realty vs. Four Corners Property | Kimco Realty vs. Netstreit Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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