Correlation Between Saul Centers and Realty Income
Can any of the company-specific risk be diversified away by investing in both Saul Centers and Realty Income 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 Saul Centers and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saul Centers and Realty Income, you can compare the effects of market volatilities on Saul Centers and Realty Income 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 Saul Centers with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saul Centers and Realty Income.
Diversification Opportunities for Saul Centers and Realty Income
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saul and Realty is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and Saul Centers 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 Saul Centers are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Saul Centers i.e., Saul Centers and Realty Income go up and down completely randomly.
Pair Corralation between Saul Centers and Realty Income
Assuming the 90 days trading horizon Saul Centers is expected to generate 1.37 times more return on investment than Realty Income. However, Saul Centers is 1.37 times more volatile than Realty Income. It trades about -0.04 of its potential returns per unit of risk. Realty Income is currently generating about -0.25 per unit of risk. If you would invest 2,335 in Saul Centers on August 28, 2024 and sell it today you would lose (38.00) from holding Saul Centers or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saul Centers vs. Realty Income
Performance |
| Timeline |
| Saul Centers |
| Realty Income |
Saul Centers and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saul Centers and Realty Income
The main advantage of trading using opposite Saul Centers and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saul Centers position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Saul Centers vs. Saul Centers | Saul Centers vs. Regency Centers | Saul Centers vs. Urban Edge Properties | Saul Centers vs. Acadia Realty Trust |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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