Correlation Between Regency Centers and Scentre
Can any of the company-specific risk be diversified away by investing in both Regency Centers and Scentre 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 Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regency Centers and Scentre Group, you can compare the effects of market volatilities on Regency Centers and Scentre 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 Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Scentre.
Diversification Opportunities for Regency Centers and Scentre
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regency and Scentre is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group 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 Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Regency Centers i.e., Regency Centers and Scentre go up and down completely randomly.
Pair Corralation between Regency Centers and Scentre
Considering the 90-day investment horizon Regency Centers is expected to generate 1.04 times more return on investment than Scentre. However, Regency Centers is 1.04 times more volatile than Scentre Group. It trades about -0.18 of its potential returns per unit of risk. Scentre Group is currently generating about -0.24 per unit of risk. If you would invest 7,450 in Regency Centers on October 25, 2024 and sell it today you would lose (337.00) from holding Regency Centers or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regency Centers vs. Scentre Group
Performance |
| Timeline |
| Regency Centers |
| Scentre Group |
Regency Centers and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regency Centers and Scentre
The main advantage of trading using opposite Regency Centers and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre'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 |
| Scentre vs. Mapletree Commercial Trust | Scentre vs. Retail Opportunity Investments | Scentre 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 Stocks Directory module to find actively traded stocks across global markets.
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