Correlation Between Universal and Kimco Realty
Can any of the company-specific risk be diversified away by investing in both Universal 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 Universal and Kimco Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal and Kimco Realty, you can compare the effects of market volatilities on Universal 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 Universal with a short position of Kimco Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal and Kimco Realty.
Diversification Opportunities for Universal and Kimco Realty
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Kimco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Universal and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco Realty and Universal 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 Universal 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 Universal i.e., Universal and Kimco Realty go up and down completely randomly.
Pair Corralation between Universal and Kimco Realty
Considering the 90-day investment horizon Universal is expected to generate 1.38 times less return on investment than Kimco Realty. In addition to that, Universal is 1.47 times more volatile than Kimco Realty. It trades about 0.03 of its total potential returns per unit of risk. Kimco Realty is currently generating about 0.06 per unit of volatility. If you would invest 4,660 in Kimco Realty on September 13, 2024 and sell it today you would earn a total of 1,540 from holding Kimco Realty or generate 33.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Universal vs. Kimco Realty
Performance |
| Timeline |
| Universal |
| Kimco Realty |
Universal and Kimco Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal and Kimco Realty
The main advantage of trading using opposite Universal and Kimco Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal 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.| Universal vs. Imperial Brands PLC | Universal vs. Japan Tobacco ADR | Universal vs. Philip Morris International | Universal vs. Turning Point Brands |
| Kimco Realty vs. Hawkins | Kimco Realty vs. Chemours Co | Kimco Realty vs. Universal | Kimco Realty vs. The Mosaic |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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