Correlation Between Alexanders and Federal Realty

Can any of the company-specific risk be diversified away by investing in both Alexanders 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 Alexanders and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alexanders and Federal Realty Investment, you can compare the effects of market volatilities on Alexanders 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 Alexanders with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexanders and Federal Realty.

Diversification Opportunities for Alexanders and Federal Realty

-0.66

Correlation Coefficient

Alexanders  Federal Realty

Excellent diversification

The 3 months correlation between Alexanders and Federal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alexanders 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 Alexanders 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 Alexanders 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 Alexanders i.e., Alexanders and Federal Realty go up and down completely randomly.

Pair Corralation between Alexanders and Federal Realty

Considering the 90-day investment horizon Alexanders is expected to generate 1.0 times more return on investment than Federal Realty. However, Alexanders is 1.0 times less risky than Federal Realty. It trades about 0.1 of its potential returns per unit of risk. Federal Realty Investment is currently generating about -0.13 per unit of risk. If you would invest  19,557  in Alexanders on December 29, 2024 and sell it today you would earn a total of  1,683  from holding Alexanders or generate 8.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alexanders  vs.  Federal Realty Investment

Alexanders

Risk-Adjusted Performance

OK

Over the last 90 days Alexanders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak essential indicators, Alexanders may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Federal Realty Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federal Realty Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Alexanders and Federal Realty

The main advantage of trading using opposite Alexanders and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexanders 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.

The idea behind Alexanders and Federal Realty Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.