Correlation Between Cedar Realty and Macerich
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Macerich 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 Macerich 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 Macerich Company, you can compare the effects of market volatilities on Cedar Realty and Macerich 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 Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Macerich.
Diversification Opportunities for Cedar Realty and Macerich
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cedar and Macerich is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Cedar Realty i.e., Cedar Realty and Macerich go up and down completely randomly.
Pair Corralation between Cedar Realty and Macerich
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.28 times more return on investment than Macerich. However, Cedar Realty is 1.28 times more volatile than Macerich Company. It trades about 0.14 of its potential returns per unit of risk. Macerich Company is currently generating about 0.04 per unit of risk. If you would invest 1,526 in Cedar Realty Trust on November 4, 2024 and sell it today you would earn a total of 88.00 from holding Cedar Realty Trust or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Macerich Company
Performance |
| Timeline |
| Cedar Realty Trust |
| Macerich |
Cedar Realty and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Macerich
The main advantage of trading using opposite Cedar Realty and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Macerich vs. Kimco Realty | Macerich vs. Regency Centers | Macerich vs. Site Centers Corp | Macerich vs. Federal Realty Investment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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