Correlation Between Realty Income and SITE Centers
Can any of the company-specific risk be diversified away by investing in both Realty Income and SITE 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 Realty Income and SITE Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and SITE Centers Corp, you can compare the effects of market volatilities on Realty Income and SITE 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 Realty Income with a short position of SITE Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and SITE Centers.
Diversification Opportunities for Realty Income and SITE Centers
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Realty and SITE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and SITE Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITE Centers Corp and Realty Income 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 Realty Income are associated (or correlated) with SITE Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITE Centers Corp has no effect on the direction of Realty Income i.e., Realty Income and SITE Centers go up and down completely randomly.
Pair Corralation between Realty Income and SITE Centers
Taking into account the 90-day investment horizon Realty Income is expected to generate 1.42 times less return on investment than SITE Centers. In addition to that, Realty Income is 1.34 times more volatile than SITE Centers Corp. It trades about 0.09 of its total potential returns per unit of risk. SITE Centers Corp is currently generating about 0.17 per unit of volatility. If you would invest 2,161 in SITE Centers Corp on September 1, 2024 and sell it today you would earn a total of 355.00 from holding SITE Centers Corp or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Realty Income vs. SITE Centers Corp
Performance |
| Timeline |
| Realty Income |
| SITE Centers Corp |
Realty Income and SITE Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and SITE Centers
The main advantage of trading using opposite Realty Income and SITE Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income position performs unexpectedly, SITE 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 SITE Centers will offset losses from the drop in SITE Centers' long position.| Realty Income vs. Federal Realty Investment | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
| SITE Centers vs. Saul Centers | SITE Centers vs. Saul Centers | SITE Centers vs. Regency Centers | SITE Centers vs. Urban Edge Properties |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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