Correlation Between Invitation Homes and Regency Centers

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

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

Diversification Opportunities for Invitation Homes and Regency Centers

-0.6

Correlation Coefficient

Invitation Homes  Regency Centers

Excellent diversification

The 3 months correlation between Invitation and Regency is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Invitation Homes and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers and Invitation Homes 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 Invitation Homes 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 Invitation Homes i.e., Invitation Homes and Regency Centers go up and down completely randomly.

Pair Corralation between Invitation Homes and Regency Centers

Given the investment horizon of 90 days Invitation Homes is expected to under-perform the Regency Centers. In addition to that, Invitation Homes is 1.87 times more volatile than Regency Centers. It trades about -0.14 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.11 per unit of volatility. If you would invest  2,332  in Regency Centers on June 29, 2025 and sell it today you would earn a total of  101.00  from holding Regency Centers or generate 4.33% return on investment over 90 days.

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

Invitation Homes  vs.  Regency Centers

Invitation Homes

Risk-Adjusted Performance

Weakest

Over the last 90 days Invitation Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Regency Centers

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 8 (%) 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 newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Invitation Homes and Regency Centers

The main advantage of trading using opposite Invitation Homes and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invitation Homes 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 Invitation Homes 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.