Correlation Between Delta Air and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Delta Air and Cedar Realty 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 Delta Air and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Cedar Realty Trust, you can compare the effects of market volatilities on Delta Air and Cedar Realty 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 Delta Air with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Cedar Realty.
Diversification Opportunities for Delta Air and Cedar Realty
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and Cedar is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust and Delta Air 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 Delta Air Lines are associated (or correlated) with Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of Delta Air i.e., Delta Air and Cedar Realty go up and down completely randomly.
Pair Corralation between Delta Air and Cedar Realty
Considering the 90-day investment horizon Delta Air Lines is expected to generate 1.32 times more return on investment than Cedar Realty. However, Delta Air is 1.32 times more volatile than Cedar Realty Trust. It trades about 0.27 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.07 per unit of risk. If you would invest 5,689 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 693.00 from holding Delta Air Lines or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Cedar Realty Trust
Performance |
| Timeline |
| Delta Air Lines |
| Cedar Realty Trust |
Delta Air and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Cedar Realty
The main advantage of trading using opposite Delta Air and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Cedar Realty 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.| Delta Air vs. JetBlue Airways Corp | Delta Air vs. Allegiant Travel | Delta Air vs. Copa Holdings SA | Delta Air vs. SkyWest |
| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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