Correlation Between Cedar Realty and Aurora Acquisition
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Aurora Acquisition 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 Cedar Realty and Aurora Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cedar Realty Trust and Aurora Acquisition Corp, you can compare the effects of market volatilities on Cedar Realty and Aurora Acquisition 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 Cedar Realty with a short position of Aurora Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Aurora Acquisition.
Diversification Opportunities for Cedar Realty and Aurora Acquisition
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cedar and Aurora is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp and Cedar Realty 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 Cedar Realty Trust are associated (or correlated) with Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of Cedar Realty i.e., Cedar Realty and Aurora Acquisition go up and down completely randomly.
Pair Corralation between Cedar Realty and Aurora Acquisition
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 3.64 times more return on investment than Aurora Acquisition. However, Cedar Realty is 3.64 times more volatile than Aurora Acquisition Corp. It trades about 0.05 of its potential returns per unit of risk. Aurora Acquisition Corp is currently generating about 0.07 per unit of risk. If you would invest 936.00 in Cedar Realty Trust on September 5, 2024 and sell it today you would earn a total of 674.00 from holding Cedar Realty Trust or generate 72.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.3% |
| Values | Daily Returns |
Cedar Realty Trust vs. Aurora Acquisition Corp
Performance |
| Timeline |
| Cedar Realty Trust |
| Aurora Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cedar Realty and Aurora Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Aurora Acquisition
The main advantage of trading using opposite Cedar Realty and Aurora Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Aurora Acquisition 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 Aurora Acquisition will offset losses from the drop in Aurora Acquisition's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Aurora Acquisition vs. CECO Environmental Corp | Aurora Acquisition vs. Bausch Lomb Corp | Aurora Acquisition vs. Western Acquisition Ventures | Aurora Acquisition vs. Postal Realty Trust |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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