Correlation Between Regency Centers and Macerich

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

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

Diversification Opportunities for Regency Centers and Macerich

-0.13

Correlation Coefficient

Regency Centers  Macerich

Good diversification

The 3 months correlation between Regency and Macerich is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Regency Centers i.e., Regency Centers and Macerich go up and down completely randomly.

Pair Corralation between Regency Centers and Macerich

Considering the 90-day investment horizon Regency Centers is expected to generate 0.55 times more return on investment than Macerich. However, Regency Centers is 1.81 times less risky than Macerich. It trades about 0.01 of its potential returns per unit of risk. Macerich Company is currently generating about -0.09 per unit of risk. If you would invest  7,271  in Regency Centers on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Regency Centers or generate 0.22% return on investment over 90 days.

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

Regency Centers  vs.  Macerich Company

Regency Centers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Regency Centers has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Macerich

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macerich Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Regency Centers and Macerich

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

The idea behind Regency Centers and Macerich Company 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.