Correlation Between Ford and KIMCO

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Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and KIMCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and KIMCO RLTY P, you can compare the effects of market volatilities on Ford 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 Ford with a short position of KIMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and KIMCO.

Diversification Opportunities for Ford and KIMCO

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Ford and KIMCO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and KIMCO go up and down completely randomly.

Pair Corralation between Ford and KIMCO

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.96 times more return on investment than KIMCO. However, Ford Motor is 1.04 times less risky than KIMCO. It trades about 0.01 of its potential returns per unit of risk. KIMCO RLTY P is currently generating about 0.0 per unit of risk. If you would invest  1,148  in Ford Motor on September 3, 2024 and sell it today you would lose (35.00) from holding Ford Motor or give up 3.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy36.16%
ValuesDaily Returns

Ford Motor  vs.  KIMCO RLTY P

 Performance 
       Timeline  
Ford Motor 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
KIMCO RLTY P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for KIMCO RLTY P investors.

Ford and KIMCO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ford and KIMCO

The main advantage of trading using opposite Ford and KIMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.
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The idea behind Ford Motor 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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