Correlation Between Algoma Steel and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Cedar 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 Algoma Steel and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algoma Steel Group and Cedar Realty Trust, you can compare the effects of market volatilities on Algoma Steel and Cedar 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 Algoma Steel with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Cedar Realty.
Diversification Opportunities for Algoma Steel and Cedar Realty
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Algoma and Cedar is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust and Algoma Steel 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 Algoma Steel Group are associated (or correlated) with Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of Algoma Steel i.e., Algoma Steel and Cedar Realty go up and down completely randomly.
Pair Corralation between Algoma Steel and Cedar Realty
Given the investment horizon of 90 days Algoma Steel is expected to generate 1.31 times less return on investment than Cedar Realty. In addition to that, Algoma Steel is 1.53 times more volatile than Cedar Realty Trust. It trades about 0.09 of its total potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.18 per unit of volatility. If you would invest 1,534 in Cedar Realty Trust on September 1, 2024 and sell it today you would earn a total of 104.00 from holding Cedar Realty Trust or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Cedar Realty Trust
Performance |
| Timeline |
| Algoma Steel Group |
| Cedar Realty Trust |
Algoma Steel and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Cedar Realty
The main advantage of trading using opposite Algoma Steel and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Cedar 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Cedar Realty vs. Site Centers Corp | Cedar Realty vs. Urban Edge Properties | Cedar Realty vs. Retail Opportunity Investments | Cedar Realty vs. Brixmor Property |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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