Correlation Between BRT Realty and Regency Centers

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

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

Diversification Opportunities for BRT Realty and Regency Centers

0.61

Correlation Coefficient

BRT Realty  Regency Centers

Poor diversification

The 3 months correlation between BRT and Regency is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and BRT 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 BRT Realty Trust 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 BRT Realty i.e., BRT Realty and Regency Centers go up and down completely randomly.

Pair Corralation between BRT Realty and Regency Centers

Considering the 90-day investment horizon BRT Realty Trust is expected to under-perform the Regency Centers. In addition to that, BRT Realty is 1.18 times more volatile than Regency Centers. It trades about -0.13 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.01 per unit of volatility. If you would invest  7,488  in Regency Centers on November 28, 2024 and sell it today you would earn a total of  37.00  from holding Regency Centers or generate 0.49% return on investment over 90 days.

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

BRT Realty Trust  vs.  Regency Centers

BRT Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRT Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Regency Centers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Regency Centers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BRT Realty and Regency Centers

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

The idea behind BRT Realty Trust and Regency Centers 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.