Correlation Between Cedar Realty and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings ADR, you can compare the effects of market volatilities on Cedar Realty and Nomura Holdings 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 Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Nomura Holdings.
Diversification Opportunities for Cedar Realty and Nomura Holdings
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cedar and Nomura is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Nomura Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings ADR 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings ADR has no effect on the direction of Cedar Realty i.e., Cedar Realty and Nomura Holdings go up and down completely randomly.
Pair Corralation between Cedar Realty and Nomura Holdings
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.24 times more return on investment than Nomura Holdings. However, Cedar Realty is 1.24 times more volatile than Nomura Holdings ADR. It trades about 0.03 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.02 per unit of risk. If you would invest 1,421 in Cedar Realty Trust on August 27, 2024 and sell it today you would earn a total of 160.00 from holding Cedar Realty Trust or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Nomura Holdings ADR
Performance |
| Timeline |
| Cedar Realty Trust |
| Nomura Holdings ADR |
Cedar Realty and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Nomura Holdings
The main advantage of trading using opposite Cedar Realty and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
| Nomura Holdings vs. Perella Weinberg Partners | Nomura Holdings vs. Oppenheimer Holdings | Nomura Holdings vs. Stifel Financial Corp | Nomura Holdings vs. Piper Sandler Companies |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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