Correlation Between Urban Edge and Regency Centers
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Regency Centers 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 Urban Edge and Regency Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Edge Properties and Regency Centers, you can compare the effects of market volatilities on Urban Edge and Regency Centers 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 Urban Edge with a short position of Regency Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Regency Centers.
Diversification Opportunities for Urban Edge and Regency Centers
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Urban and Regency is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and Urban Edge 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 Urban Edge Properties are associated (or correlated) with Regency Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Centers has no effect on the direction of Urban Edge i.e., Urban Edge and Regency Centers go up and down completely randomly.
Pair Corralation between Urban Edge and Regency Centers
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the Regency Centers. In addition to that, Urban Edge is 1.34 times more volatile than Regency Centers. It trades about -0.03 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.05 per unit of volatility. If you would invest 7,108 in Regency Centers on November 5, 2024 and sell it today you would earn a total of 76.00 from holding Regency Centers or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. Regency Centers
Performance |
| Timeline |
| Urban Edge Properties |
| Regency Centers |
Urban Edge and Regency Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and Regency Centers
The main advantage of trading using opposite Urban Edge and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Regency Centers 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 Regency Centers will offset losses from the drop in Regency Centers' long position.| Urban Edge vs. Saul Centers | Urban Edge vs. Rithm Property Trust | Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group |
| Regency Centers vs. Saul Centers | Regency Centers vs. Retail Opportunity Investments | Regency Centers vs. Rithm Property Trust | Regency Centers vs. Getty 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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