Correlation Between Cedar Realty and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Lululemon Athletica 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 Lululemon Athletica 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 Lululemon Athletica, you can compare the effects of market volatilities on Cedar Realty and Lululemon Athletica 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 Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Lululemon Athletica.
Diversification Opportunities for Cedar Realty and Lululemon Athletica
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cedar and Lululemon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica 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 Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of Cedar Realty i.e., Cedar Realty and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Cedar Realty and Lululemon Athletica
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 0.82 times more return on investment than Lululemon Athletica. However, Cedar Realty Trust is 1.21 times less risky than Lululemon Athletica. It trades about 0.16 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.12 per unit of risk. If you would invest 1,512 in Cedar Realty Trust on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Cedar Realty Trust or generate 7.14% 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. Lululemon Athletica
Performance |
| Timeline |
| Cedar Realty Trust |
| Lululemon Athletica |
Cedar Realty and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Lululemon Athletica
The main advantage of trading using opposite Cedar Realty and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica'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 |
| Lululemon Athletica vs. VF Corporation | Lululemon Athletica vs. Levi Strauss Co | Lululemon Athletica vs. Under Armour A | Lululemon Athletica vs. Oxford Industries |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |