Correlation Between Regency Centers and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Regency Centers and Slate Grocery 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 Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regency Centers and Slate Grocery REIT, you can compare the effects of market volatilities on Regency Centers and Slate Grocery 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 Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Slate Grocery.
Diversification Opportunities for Regency Centers and Slate Grocery
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regency and Slate is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Regency Centers i.e., Regency Centers and Slate Grocery go up and down completely randomly.
Pair Corralation between Regency Centers and Slate Grocery
Considering the 90-day investment horizon Regency Centers is expected to generate 0.84 times more return on investment than Slate Grocery. However, Regency Centers is 1.19 times less risky than Slate Grocery. It trades about 0.05 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.02 per unit of risk. If you would invest 5,817 in Regency Centers on September 14, 2024 and sell it today you would earn a total of 1,720 from holding Regency Centers or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regency Centers vs. Slate Grocery REIT
Performance |
| Timeline |
| Regency Centers |
| Slate Grocery REIT |
Regency Centers and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regency Centers and Slate Grocery
The main advantage of trading using opposite Regency Centers and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.| Regency Centers vs. Saul Centers | Regency Centers vs. Retail Opportunity Investments | Regency Centers vs. Rithm Property Trust | Regency Centers vs. Getty Realty |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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