Correlation Between Regency Centers and Agree Realty

Can any of the company-specific risk be diversified away by investing in both Regency Centers and Agree 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 Agree 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 Agree Realty, you can compare the effects of market volatilities on Regency Centers and Agree 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 Agree Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Centers and Agree Realty.

Diversification Opportunities for Regency Centers and Agree Realty

0.49

Correlation Coefficient

Regency Centers  Agree Realty

Very weak diversification

The 3 months correlation between Regency and Agree is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree 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 Agree Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of Regency Centers i.e., Regency Centers and Agree Realty go up and down completely randomly.

Pair Corralation between Regency Centers and Agree Realty

Considering the 90-day investment horizon Regency Centers is expected to generate 0.95 times more return on investment than Agree Realty. However, Regency Centers is 1.05 times less risky than Agree Realty. It trades about 0.02 of its potential returns per unit of risk. Agree Realty is currently generating about -0.01 per unit of risk. If you would invest  7,073  in Regency Centers on April 25, 2025 and sell it today you would earn a total of  74.00  from holding Regency Centers or generate 1.05% 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.  Agree Realty

Regency Centers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 1 (%) 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Agree Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agree Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Agree Realty is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Regency Centers and Agree Realty

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

The idea behind Regency Centers and Agree 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.