Correlation Between Cedar Realty and Real Estate
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Real Estate 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 Real Estate 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 Real Estate Securities, you can compare the effects of market volatilities on Cedar Realty and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Real Estate.
Diversification Opportunities for Cedar Realty and Real Estate
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cedar and Real is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of Cedar Realty i.e., Cedar Realty and Real Estate go up and down completely randomly.
Pair Corralation between Cedar Realty and Real Estate
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 2.1 times more return on investment than Real Estate. However, Cedar Realty is 2.1 times more volatile than Real Estate Securities. It trades about 0.06 of its potential returns per unit of risk. Real Estate Securities is currently generating about 0.09 per unit of risk. If you would invest 1,135 in Cedar Realty Trust on August 28, 2024 and sell it today you would earn a total of 257.00 from holding Cedar Realty Trust or generate 22.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Cedar Realty Trust vs. Real Estate Securities
Performance |
| Timeline |
| Cedar Realty Trust |
| Real Estate Securities |
Cedar Realty and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Real Estate
The main advantage of trading using opposite Cedar Realty and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
| Real Estate vs. Quantitative Longshort Equity | Real Estate vs. Maryland Short Term Tax Free | Real Estate vs. Old Westbury Short Term | Real Estate vs. Ultra Short Term Fixed |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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