Correlation Between Regency Centers and Waters
Can any of the company-specific risk be diversified away by investing in both Regency Centers and Waters 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 Waters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regency Centers and Waters, you can compare the effects of market volatilities on Regency Centers and Waters 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 Waters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Waters.
Diversification Opportunities for Regency Centers and Waters
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Regency and Waters is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters 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 Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Regency Centers i.e., Regency Centers and Waters go up and down completely randomly.
Pair Corralation between Regency Centers and Waters
Assuming the 90 days horizon Regency Centers is expected to generate 0.6 times more return on investment than Waters. However, Regency Centers is 1.67 times less risky than Waters. It trades about 0.03 of its potential returns per unit of risk. Waters is currently generating about -0.01 per unit of risk. If you would invest 2,296 in Regency Centers on December 28, 2024 and sell it today you would earn a total of 45.00 from holding Regency Centers or generate 1.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Regency Centers vs. Waters
Performance |
Timeline |
Regency Centers |
Waters |
Regency Centers and Waters Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regency Centers and Waters
The main advantage of trading using opposite Regency Centers and Waters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regency Centers position performs unexpectedly, Waters 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 Waters will offset losses from the drop in Waters' long position.Regency Centers vs. Fomento Economico Mexicano | Regency Centers vs. Fevertree Drinks Plc | Regency Centers vs. Westrock Coffee | Regency Centers vs. SNDL Inc |
Waters vs. IDEXX Laboratories | Waters vs. IQVIA Holdings | Waters vs. Charles River Laboratories | Waters vs. Revvity |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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