Correlation Between Cedar Realty and Western Sierra
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Western Sierra 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 Western Sierra 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 Western Sierra Mining, you can compare the effects of market volatilities on Cedar Realty and Western Sierra 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 Western Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Western Sierra.
Diversification Opportunities for Cedar Realty and Western Sierra
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cedar and Western is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Western Sierra Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Sierra Mining 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 Western Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Sierra Mining has no effect on the direction of Cedar Realty i.e., Cedar Realty and Western Sierra go up and down completely randomly.
Pair Corralation between Cedar Realty and Western Sierra
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 3.59 times more return on investment than Western Sierra. However, Cedar Realty is 3.59 times more volatile than Western Sierra Mining. It trades about 0.07 of its potential returns per unit of risk. Western Sierra Mining is currently generating about 0.0 per unit of risk. If you would invest 1,603 in Cedar Realty Trust on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Cedar Realty Trust or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cedar Realty Trust vs. Western Sierra Mining
Performance |
| Timeline |
| Cedar Realty Trust |
| Western Sierra Mining |
Cedar Realty and Western Sierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Western Sierra
The main advantage of trading using opposite Cedar Realty and Western Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Western Sierra 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 Western Sierra will offset losses from the drop in Western Sierra's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Western Sierra vs. Green Cures Botanical | Western Sierra vs. Cann American Corp | Western Sierra vs. Galexxy Holdings | Western Sierra vs. Indoor Harvest Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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