Correlation Between Federal Realty and Realty Income
Can any of the company-specific risk be diversified away by investing in both Federal Realty 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 Federal Realty and Realty Income 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 Realty Income, you can compare the effects of market volatilities on Federal Realty 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 Federal Realty with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Realty Income.
Diversification Opportunities for Federal Realty and Realty Income
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federal and Realty is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 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 Federal Realty i.e., Federal Realty and Realty Income go up and down completely randomly.
Pair Corralation between Federal Realty and Realty Income
Considering the 90-day investment horizon Federal Realty Investment is expected to generate 0.9 times more return on investment than Realty Income. However, Federal Realty Investment is 1.11 times less risky than Realty Income. It trades about 0.07 of its potential returns per unit of risk. Realty Income is currently generating about -0.25 per unit of risk. If you would invest 11,324 in Federal Realty Investment on August 27, 2024 and sell it today you would earn a total of 162.00 from holding Federal Realty Investment or generate 1.43% 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. Realty Income
Performance |
| Timeline |
| Federal Realty Investment |
| Realty Income |
Federal Realty and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Realty Income
The main advantage of trading using opposite Federal Realty and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty 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.| Federal Realty vs. Agree Realty | Federal Realty vs. Regency Centers | Federal Realty vs. Netstreit Corp | Federal Realty vs. Kimco Realty |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |