Correlation Between Regency Centers and Federal Realty

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

Diversification Opportunities for Regency Centers and Federal Realty

0.68

Correlation Coefficient

Regency Centers  Federal Realty

Poor diversification

The 3 months correlation between Regency and Federal is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Regency Centers and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment 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 Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Regency Centers i.e., Regency Centers and Federal Realty go up and down completely randomly.

Pair Corralation between Regency Centers and Federal Realty

Considering the 90-day investment horizon Regency Centers is expected to under-perform the Federal Realty. But the stock apears to be less risky and, when comparing its historical volatility, Regency Centers is 1.1 times less risky than Federal Realty. The stock trades about -0.14 of its potential returns per unit of risk. The Federal Realty Investment is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  9,563  in Federal Realty Investment on April 10, 2025 and sell it today you would lose (141.00) from holding Federal Realty Investment or give up 1.47% of portfolio value over 90 days.

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

Regency Centers  vs.  Federal Realty Investment

Regency Centers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Centers are ranked lower than 3 (%) 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.

Federal Realty Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Realty Investment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Federal Realty may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Regency Centers and Federal Realty

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

The idea behind Regency Centers and Federal Realty Investment 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.