Correlation Between Regency Centers and Realty Income
Can any of the company-specific risk be diversified away by investing in both Regency 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 Regency 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 Regency Centers and Realty Income, you can compare the effects of market volatilities on Regency 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 Regency Centers with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Realty Income.
Diversification Opportunities for Regency Centers and Realty Income
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regency and Realty is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 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 Regency Centers i.e., Regency Centers and Realty Income go up and down completely randomly.
Pair Corralation between Regency Centers and Realty Income
Considering the 90-day investment horizon Regency Centers is expected to generate 0.65 times more return on investment than Realty Income. However, Regency Centers is 1.55 times less risky than Realty Income. It trades about 0.21 of its potential returns per unit of risk. Realty Income is currently generating about -0.25 per unit of risk. If you would invest 7,175 in Regency Centers on August 28, 2024 and sell it today you would earn a total of 227.00 from holding Regency Centers or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regency Centers vs. Realty Income
Performance |
| Timeline |
| Regency Centers |
| Realty Income |
Regency Centers and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regency Centers and Realty Income
The main advantage of trading using opposite Regency Centers and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency 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.| Regency Centers vs. Saul Centers | Regency Centers vs. Retail Opportunity Investments | Regency Centers vs. Getty Realty | Regency Centers vs. Site Centers Corp |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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