Correlation Between Cedar Realty and Semtech
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Semtech 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 Semtech 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 Semtech, you can compare the effects of market volatilities on Cedar Realty and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Semtech.
Diversification Opportunities for Cedar Realty and Semtech
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cedar and Semtech is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Cedar Realty i.e., Cedar Realty and Semtech go up and down completely randomly.
Pair Corralation between Cedar Realty and Semtech
Assuming the 90 days trading horizon Cedar Realty is expected to generate 2.72 times less return on investment than Semtech. But when comparing it to its historical volatility, Cedar Realty Trust is 1.5 times less risky than Semtech. It trades about 0.09 of its potential returns per unit of risk. Semtech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,382 in Semtech on August 30, 2024 and sell it today you would earn a total of 2,038 from holding Semtech or generate 46.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Semtech
Performance |
| Timeline |
| Cedar Realty Trust |
| Semtech |
Cedar Realty and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Semtech
The main advantage of trading using opposite Cedar Realty and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Semtech vs. MACOM Technology Solutions | Semtech vs. FormFactor | Semtech vs. MaxLinear | Semtech vs. nLIGHT Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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