Correlation Between Kimco Realty and Macerich
Can any of the company-specific risk be diversified away by investing in both Kimco Realty and Macerich 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 Realty and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimco Realty and Macerich Company, you can compare the effects of market volatilities on Kimco Realty and Macerich 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 Realty with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimco Realty and Macerich.
Diversification Opportunities for Kimco Realty and Macerich
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kimco and Macerich is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kimco Realty and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Kimco Realty 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 Realty are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Kimco Realty i.e., Kimco Realty and Macerich go up and down completely randomly.
Pair Corralation between Kimco Realty and Macerich
Considering the 90-day investment horizon Kimco Realty is expected to generate 1.7 times less return on investment than Macerich. But when comparing it to its historical volatility, Kimco Realty is 1.89 times less risky than Macerich. It trades about 0.42 of its potential returns per unit of risk. Macerich Company is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,833 in Macerich Company on August 30, 2024 and sell it today you would earn a total of 282.00 from holding Macerich Company or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimco Realty vs. Macerich Company
Performance |
| Timeline |
| Kimco Realty |
| Macerich |
Kimco Realty and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimco Realty and Macerich
The main advantage of trading using opposite Kimco Realty and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimco Realty position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Kimco Realty vs. Saul Centers | Kimco Realty vs. Brixmor Property | Kimco Realty vs. Four Corners Property | Kimco Realty vs. Netstreit Corp |
| Macerich vs. CBL Associates Properties | Macerich vs. Cedar Realty Trust | Macerich vs. Simon Property Group | Macerich vs. Realty Income |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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