Correlation Between RPT Realty and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both RPT Realty and Tanger Factory 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 RPT Realty and Tanger Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPT Realty and Tanger Factory Outlet, you can compare the effects of market volatilities on RPT Realty and Tanger Factory 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 RPT Realty with a short position of Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPT Realty and Tanger Factory.
Diversification Opportunities for RPT Realty and Tanger Factory
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RPT and Tanger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding RPT Realty and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet and RPT Realty 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 RPT Realty are associated (or correlated) with Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of RPT Realty i.e., RPT Realty and Tanger Factory go up and down completely randomly.
Pair Corralation between RPT Realty and Tanger Factory
Considering the 90-day investment horizon RPT Realty is expected to generate 0.98 times more return on investment than Tanger Factory. However, RPT Realty is 1.02 times less risky than Tanger Factory. It trades about 0.18 of its potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.11 per unit of risk. If you would invest 1,026 in RPT Realty on August 31, 2024 and sell it today you would earn a total of 85.00 from holding RPT Realty or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 8.56% |
| Values | Daily Returns |
RPT Realty vs. Tanger Factory Outlet
Performance |
| Timeline |
| RPT Realty |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tanger Factory Outlet |
RPT Realty and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPT Realty and Tanger Factory
The main advantage of trading using opposite RPT Realty and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPT Realty position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory's long position.| RPT Realty vs. Urban Edge Properties | RPT Realty vs. Kite Realty Group | RPT Realty vs. Retail Opportunity Investments | RPT Realty vs. Inventrust Properties Corp |
| Tanger Factory vs. Federal Realty Investment | Tanger Factory vs. Macerich Company | Tanger Factory vs. National Retail Properties | Tanger Factory 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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