Correlation Between Regency Centers and Agree Realty
Can any of the company-specific risk be diversified away by investing in both Regency Centers and Agree 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 Regency Centers and Agree Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regency Centers and Agree Realty, you can compare the effects of market volatilities on Regency Centers and Agree 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 Regency Centers with a short position of Agree Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Agree Realty.
Diversification Opportunities for Regency Centers and Agree Realty
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regency and Agree is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree Realty and Regency 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 Regency Centers are associated (or correlated) with Agree Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of Regency Centers i.e., Regency Centers and Agree Realty go up and down completely randomly.
Pair Corralation between Regency Centers and Agree Realty
Considering the 90-day investment horizon Regency Centers is expected to generate 1.45 times less return on investment than Agree Realty. But when comparing it to its historical volatility, Regency Centers is 1.01 times less risky than Agree Realty. It trades about 0.07 of its potential returns per unit of risk. Agree Realty is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,757 in Agree Realty on August 27, 2024 and sell it today you would earn a total of 1,888 from holding Agree Realty or generate 32.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regency Centers vs. Agree Realty
Performance |
| Timeline |
| Regency Centers |
| Agree Realty |
Regency Centers and Agree Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regency Centers and Agree Realty
The main advantage of trading using opposite Regency Centers and Agree Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers position performs unexpectedly, Agree 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 Agree Realty will offset losses from the drop in Agree Realty's long position.| Regency Centers vs. Saul Centers | Regency Centers vs. Retail Opportunity Investments | Regency Centers vs. Getty Realty | Regency Centers vs. Site Centers Corp |
| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. Netstreit Corp | Agree Realty 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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