Correlation Between VICI Properties and Regency Centers

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

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

Diversification Opportunities for VICI Properties and Regency Centers

-0.08

Correlation Coefficient

VICI Properties  Regency Centers

Good diversification

The 3 months correlation between VICI and Regency is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and VICI Properties 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 VICI Properties 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 VICI Properties i.e., VICI Properties and Regency Centers go up and down completely randomly.

Pair Corralation between VICI Properties and Regency Centers

Given the investment horizon of 90 days VICI Properties is expected to under-perform the Regency Centers. In addition to that, VICI Properties is 1.17 times more volatile than Regency Centers. It trades about -0.09 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.03 per unit of volatility. If you would invest  2,396  in Regency Centers on September 12, 2024 and sell it today you would earn a total of  34.00  from holding Regency Centers or generate 1.42% return on investment over 90 days.

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

VICI Properties  vs.  Regency Centers

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, VICI Properties is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Regency Centers

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 VICI Properties and Regency Centers

The main advantage of trading using opposite VICI Properties and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties 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 VICI Properties 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.