Correlation Between Retail Opportunity and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Federal 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 Retail Opportunity and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Opportunity Investments and Federal Realty Investment, you can compare the effects of market volatilities on Retail Opportunity and Federal 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 Retail Opportunity with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Federal Realty.
Diversification Opportunities for Retail Opportunity and Federal Realty
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Retail and Federal is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Retail Opportunity 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 Retail Opportunity Investments are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Federal Realty go up and down completely randomly.
Pair Corralation between Retail Opportunity and Federal Realty
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 1.9 times more return on investment than Federal Realty. However, Retail Opportunity is 1.9 times more volatile than Federal Realty Investment. It trades about 0.26 of its potential returns per unit of risk. Federal Realty Investment is currently generating about 0.11 per unit of risk. If you would invest 1,566 in Retail Opportunity Investments on August 28, 2024 and sell it today you would earn a total of 174.00 from holding Retail Opportunity Investments or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Federal Realty Investment
Performance |
| Timeline |
| Retail Opportunity |
| Federal Realty Investment |
Retail Opportunity and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Federal Realty
The main advantage of trading using opposite Retail Opportunity and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Federal 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
| Federal Realty vs. Agree Realty | Federal Realty vs. Regency Centers | Federal Realty vs. Netstreit Corp | Federal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |