Correlation Between Idaho Strategic and Regency Centers

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

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

Diversification Opportunities for Idaho Strategic and Regency Centers

0.73

Correlation Coefficient

Idaho Strategic  Regency Centers

Poor diversification

The 3 months correlation between Idaho and Regency is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Idaho Strategic Resources and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and Idaho Strategic 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 Idaho Strategic Resources 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 Idaho Strategic i.e., Idaho Strategic and Regency Centers go up and down completely randomly.

Pair Corralation between Idaho Strategic and Regency Centers

Considering the 90-day investment horizon Idaho Strategic Resources is expected to generate 2.08 times more return on investment than Regency Centers. However, Idaho Strategic is 2.08 times more volatile than Regency Centers. It trades about 0.4 of its potential returns per unit of risk. Regency Centers is currently generating about 0.07 per unit of risk. If you would invest  1,004  in Idaho Strategic Resources on October 26, 2024 and sell it today you would earn a total of  230.00  from holding Idaho Strategic Resources or generate 22.91% return on investment over 90 days.

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

Idaho Strategic Resources  vs.  Regency Centers

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Regency Centers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regency Centers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Regency Centers is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Idaho Strategic and Regency Centers

The main advantage of trading using opposite Idaho Strategic and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idaho Strategic 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 Idaho Strategic Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.