Correlation Between Cedar Realty and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on Cedar Realty and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Summit Hotel.
Diversification Opportunities for Cedar Realty and Summit Hotel
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cedar and Summit is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Cedar Realty i.e., Cedar Realty and Summit Hotel go up and down completely randomly.
Pair Corralation between Cedar Realty and Summit Hotel
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.48 times more return on investment than Summit Hotel. However, Cedar Realty is 1.48 times more volatile than Summit Hotel Properties. It trades about 0.06 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.03 per unit of risk. If you would invest 1,200 in Cedar Realty Trust on September 1, 2024 and sell it today you would earn a total of 438.00 from holding Cedar Realty Trust or generate 36.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Summit Hotel Properties
Performance |
| Timeline |
| Cedar Realty Trust |
| Summit Hotel Properties |
Cedar Realty and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Summit Hotel
The main advantage of trading using opposite Cedar Realty and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Cedar Realty vs. Site Centers Corp | Cedar Realty vs. Urban Edge Properties | Cedar Realty vs. Retail Opportunity Investments | Cedar Realty vs. Brixmor Property |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. RLJ Lodging 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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