Correlation Between CDL INVESTMENT and Lexington Realty
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Lexington 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 CDL INVESTMENT and Lexington Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Lexington Realty Trust, you can compare the effects of market volatilities on CDL INVESTMENT and Lexington 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 CDL INVESTMENT with a short position of Lexington Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Lexington Realty.
Diversification Opportunities for CDL INVESTMENT and Lexington Realty
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CDL and Lexington is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Lexington Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexington Realty Trust and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Lexington Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexington Realty Trust has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Lexington Realty go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Lexington Realty
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 1.09 times less return on investment than Lexington Realty. In addition to that, CDL INVESTMENT is 1.34 times more volatile than Lexington Realty Trust. It trades about 0.02 of its total potential returns per unit of risk. Lexington Realty Trust is currently generating about 0.04 per unit of volatility. If you would invest 755.00 in Lexington Realty Trust on December 2, 2024 and sell it today you would earn a total of 90.00 from holding Lexington Realty Trust or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Lexington Realty Trust
Performance |
| Timeline |
| CDL INVESTMENT |
| Lexington Realty Trust |
CDL INVESTMENT and Lexington Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Lexington Realty
The main advantage of trading using opposite CDL INVESTMENT and Lexington Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Lexington 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 Lexington Realty will offset losses from the drop in Lexington Realty's long position.| CDL INVESTMENT vs. Hanison Construction Holdings | CDL INVESTMENT vs. China Railway Construction | CDL INVESTMENT vs. Sterling Construction | CDL INVESTMENT vs. ONWARD MEDICAL BV |
| Lexington Realty vs. G III Apparel Group | Lexington Realty vs. RCI Hospitality Holdings | Lexington Realty vs. GRUPO CARSO A1 | Lexington Realty vs. UNIDOC HEALTH P |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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