Correlation Between Regency Centers and Getty Realty

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

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

Diversification Opportunities for Regency Centers and Getty Realty

0.58

Correlation Coefficient

Regency Centers  Getty Realty

Very weak diversification

The 3 months correlation between Regency and Getty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty and Regency Centers 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 Regency Centers are associated (or correlated) with Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Regency Centers i.e., Regency Centers and Getty Realty go up and down completely randomly.

Pair Corralation between Regency Centers and Getty Realty

Considering the 90-day investment horizon Regency Centers is expected to generate 1.1 times less return on investment than Getty Realty. In addition to that, Regency Centers is 1.05 times more volatile than Getty Realty. It trades about 0.1 of its total potential returns per unit of risk. Getty Realty is currently generating about 0.11 per unit of volatility. If you would invest  3,133  in Getty Realty on August 31, 2024 and sell it today you would earn a total of  198.00  from holding Getty Realty or generate 6.32% return on investment over 90 days.

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

Regency Centers  vs.  Getty Realty

Regency Centers

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 7 (%) 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.

Getty Realty

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Getty Realty are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Getty Realty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Regency Centers and Getty Realty

The main advantage of trading using opposite Regency Centers and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers position performs unexpectedly, Getty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.

The idea behind Regency Centers and Getty Realty 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.