Correlation Between Cedar Realty and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture, you can compare the effects of market volatilities on Cedar Realty and Hooker Furniture 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 Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Hooker Furniture.
Diversification Opportunities for Cedar Realty and Hooker Furniture
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cedar and Hooker is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture 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 Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Cedar Realty i.e., Cedar Realty and Hooker Furniture go up and down completely randomly.
Pair Corralation between Cedar Realty and Hooker Furniture
Assuming the 90 days trading horizon Cedar Realty is expected to generate 2.53 times less return on investment than Hooker Furniture. But when comparing it to its historical volatility, Cedar Realty Trust is 1.55 times less risky than Hooker Furniture. It trades about 0.16 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,605 in Hooker Furniture on August 28, 2024 and sell it today you would earn a total of 306.00 from holding Hooker Furniture or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Hooker Furniture
Performance |
| Timeline |
| Cedar Realty Trust |
| Hooker Furniture |
Cedar Realty and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Hooker Furniture
The main advantage of trading using opposite Cedar Realty and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Hooker Furniture 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |