Correlation Between Primaris Real and Regency Centers

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

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

Diversification Opportunities for Primaris Real and Regency Centers

-0.67

Correlation Coefficient

Primaris Real  Regency Centers

Excellent diversification

The 3 months correlation between Primaris and Regency is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Real Estate and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and Primaris Real 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 Primaris Real Estate 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 Primaris Real i.e., Primaris Real and Regency Centers go up and down completely randomly.

Pair Corralation between Primaris Real and Regency Centers

Assuming the 90 days horizon Primaris Real Estate is expected to under-perform the Regency Centers. In addition to that, Primaris Real is 1.3 times more volatile than Regency Centers. It trades about -0.08 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.06 per unit of volatility. If you would invest  7,147  in Regency Centers on September 23, 2024 and sell it today you would earn a total of  233.00  from holding Regency Centers or generate 3.26% return on investment over 90 days.

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

Primaris Real Estate  vs.  Regency Centers

Primaris Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Regency Centers

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 4 (%) 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 Primaris Real and Regency Centers

The main advantage of trading using opposite Primaris Real and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Real 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 Primaris Real Estate 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.