Correlation Between Cedar Realty and Delta Air
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Cedar Realty and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Delta Air.
Diversification Opportunities for Cedar Realty and Delta Air
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cedar and Delta is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Cedar Realty i.e., Cedar Realty and Delta Air go up and down completely randomly.
Pair Corralation between Cedar Realty and Delta Air
Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.16 times less return on investment than Delta Air. In addition to that, Cedar Realty is 1.3 times more volatile than Delta Air Lines. It trades about 0.07 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.1 per unit of volatility. If you would invest 4,119 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 2,263 from holding Delta Air Lines or generate 54.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Delta Air Lines
Performance |
| Timeline |
| Cedar Realty Trust |
| Delta Air Lines |
Cedar Realty and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Delta Air
The main advantage of trading using opposite Cedar Realty and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Delta Air vs. JetBlue Airways Corp | Delta Air vs. Allegiant Travel | Delta Air vs. Copa Holdings SA | Delta Air vs. SkyWest |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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