Correlation Between Cedar Realty and Cool
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Cool 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 Cool 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 Cool Company, you can compare the effects of market volatilities on Cedar Realty and Cool 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 Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Cool.
Diversification Opportunities for Cedar Realty and Cool
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cedar and Cool is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company 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 Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Cedar Realty i.e., Cedar Realty and Cool go up and down completely randomly.
Pair Corralation between Cedar Realty and Cool
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 0.72 times more return on investment than Cool. However, Cedar Realty Trust is 1.4 times less risky than Cool. It trades about 0.13 of its potential returns per unit of risk. Cool Company is currently generating about -0.47 per unit of risk. If you would invest 1,570 in Cedar Realty Trust on September 14, 2024 and sell it today you would earn a total of 103.00 from holding Cedar Realty Trust or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Cool Company
Performance |
| Timeline |
| Cedar Realty Trust |
| Cool Company |
Cedar Realty and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Cool
The main advantage of trading using opposite Cedar Realty and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.| Cedar Realty vs. Simon Property Group | Cedar Realty vs. Saul Centers | Cedar Realty vs. Rithm Property Trust | Cedar Realty vs. Urban Edge Properties |
| Cool vs. Century Aluminum | Cool vs. Cedar Realty Trust | Cool vs. Coupang LLC | Cool vs. SunLink Health Systems |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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