Correlation Between Alphabet and Kimco Realty
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Kimco Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Kimco Realty, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Kimco Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Kimco Realty.
Diversification Opportunities for Alphabet and Kimco Realty
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and Kimco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Kimco Realty go up and down completely randomly.
Pair Corralation between Alphabet and Kimco Realty
Given the investment horizon of 90 days Alphabet is expected to generate 5.2 times less return on investment than Kimco Realty. In addition to that, Alphabet is 2.18 times more volatile than Kimco Realty. It trades about 0.04 of its total potential returns per unit of risk. Kimco Realty is currently generating about 0.45 per unit of volatility. If you would invest 2,200 in Kimco Realty on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Kimco Realty or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Kimco Realty
Performance |
| Timeline |
| Alphabet Class C |
| Kimco Realty |
Alphabet and Kimco Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Kimco Realty
The main advantage of trading using opposite Alphabet and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.The idea behind Alphabet Inc Class C and Kimco Realty 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.| Kimco Realty vs. DFS Furniture PLC | Kimco Realty vs. Pembina Pipeline Corp | Kimco Realty vs. British American Tobacco | Kimco Realty vs. Japan Tobacco |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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