Correlation Between Federal Realty and Saul Centers
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Saul Centers 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 Federal Realty and Saul Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and Saul Centers, you can compare the effects of market volatilities on Federal Realty and Saul Centers 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 Federal Realty with a short position of Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Saul Centers.
Diversification Opportunities for Federal Realty and Saul Centers
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federal and Saul is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers and Federal 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 Federal Realty Investment are associated (or correlated) with Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Federal Realty i.e., Federal Realty and Saul Centers go up and down completely randomly.
Pair Corralation between Federal Realty and Saul Centers
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.65 times more return on investment than Saul Centers. However, Federal Realty Investment is 1.54 times less risky than Saul Centers. It trades about 0.04 of its potential returns per unit of risk. Saul Centers is currently generating about 0.02 per unit of risk. If you would invest 1,856 in Federal Realty Investment on September 2, 2024 and sell it today you would earn a total of 338.00 from holding Federal Realty Investment or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. Saul Centers
Performance |
| Timeline |
| Federal Realty Investment |
| Saul Centers |
Federal Realty and Saul Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Saul Centers
The main advantage of trading using opposite Federal Realty and Saul Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Saul Centers 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 Saul Centers will offset losses from the drop in Saul Centers' long position.| Federal Realty vs. Site Centers Corp | Federal Realty vs. Urban Edge Properties | Federal Realty vs. Retail Opportunity Investments | Federal Realty vs. Brixmor Property |
| Saul Centers vs. Urban Edge Properties | Saul Centers vs. Site Centers Corp | Saul Centers vs. Kite Realty Group | Saul Centers vs. Acadia Realty Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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