Correlation Between Cedar Realty and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Plexus Corp 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 Plexus Corp 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 Plexus Corp, you can compare the effects of market volatilities on Cedar Realty and Plexus Corp 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 Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Plexus Corp.
Diversification Opportunities for Cedar Realty and Plexus Corp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cedar and Plexus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of Cedar Realty i.e., Cedar Realty and Plexus Corp go up and down completely randomly.
Pair Corralation between Cedar Realty and Plexus Corp
Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.58 times less return on investment than Plexus Corp. In addition to that, Cedar Realty is 1.27 times more volatile than Plexus Corp. It trades about 0.09 of its total potential returns per unit of risk. Plexus Corp is currently generating about 0.18 per unit of volatility. If you would invest 12,811 in Plexus Corp on August 30, 2024 and sell it today you would earn a total of 3,422 from holding Plexus Corp or generate 26.71% 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. Plexus Corp
Performance |
| Timeline |
| Cedar Realty Trust |
| Plexus Corp |
Cedar Realty and Plexus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Plexus Corp
The main advantage of trading using opposite Cedar Realty and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Plexus Corp 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 Plexus Corp will offset losses from the drop in Plexus Corp's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Plexus Corp vs. Sanmina | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Methode Electronics | Plexus Corp vs. Celestica |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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