Correlation Between Cedar Realty and Genuine Parts
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Genuine Parts 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 Genuine Parts 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 Genuine Parts Co, you can compare the effects of market volatilities on Cedar Realty and Genuine Parts 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 Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Genuine Parts.
Diversification Opportunities for Cedar Realty and Genuine Parts
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cedar and Genuine is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts 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 Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of Cedar Realty i.e., Cedar Realty and Genuine Parts go up and down completely randomly.
Pair Corralation between Cedar Realty and Genuine Parts
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.4 times more return on investment than Genuine Parts. However, Cedar Realty is 1.4 times more volatile than Genuine Parts Co. It trades about 0.05 of its potential returns per unit of risk. Genuine Parts Co is currently generating about 0.01 per unit of risk. If you would invest 1,240 in Cedar Realty Trust on August 25, 2024 and sell it today you would earn a total of 341.00 from holding Cedar Realty Trust or generate 27.5% 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. Genuine Parts Co
Performance |
| Timeline |
| Cedar Realty Trust |
| Genuine Parts |
Cedar Realty and Genuine Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Genuine Parts
The main advantage of trading using opposite Cedar Realty and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Genuine Parts vs. Steven Madden | Genuine Parts vs. Vera Bradley | Genuine Parts vs. Caleres | Genuine Parts vs. Rocky Brands |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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