Correlation Between Cedar Realty and Sun Life
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Cedar Realty and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Sun Life.
Diversification Opportunities for Cedar Realty and Sun Life
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cedar and Sun is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Cedar Realty i.e., Cedar Realty and Sun Life go up and down completely randomly.
Pair Corralation between Cedar Realty and Sun Life
Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.18 times less return on investment than Sun Life. In addition to that, Cedar Realty is 2.4 times more volatile than Sun Life Financial. It trades about 0.04 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.11 per unit of volatility. If you would invest 5,144 in Sun Life Financial on September 3, 2024 and sell it today you would earn a total of 995.00 from holding Sun Life Financial or generate 19.34% 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. Sun Life Financial
Performance |
| Timeline |
| Cedar Realty Trust |
| Sun Life Financial |
Cedar Realty and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Sun Life
The main advantage of trading using opposite Cedar Realty and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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