Correlation Between Federal Realty and CBL Associates
Can any of the company-specific risk be diversified away by investing in both Federal Realty and CBL Associates 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 Federal Realty and CBL Associates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and CBL Associates Properties, you can compare the effects of market volatilities on Federal Realty and CBL Associates 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 Federal Realty with a short position of CBL Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and CBL Associates.
Diversification Opportunities for Federal Realty and CBL Associates
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and CBL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties and Federal 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 Federal Realty Investment are associated (or correlated) with CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Federal Realty i.e., Federal Realty and CBL Associates go up and down completely randomly.
Pair Corralation between Federal Realty and CBL Associates
Assuming the 90 days trading horizon Federal Realty Investment is expected to under-perform the CBL Associates. But the preferred stock apears to be less risky and, when comparing its historical volatility, Federal Realty Investment is 1.75 times less risky than CBL Associates. The preferred stock trades about -0.13 of its potential returns per unit of risk. The CBL Associates Properties is currently generating about 0.63 of returns per unit of risk over similar time horizon. If you would invest 2,592 in CBL Associates Properties on September 2, 2024 and sell it today you would earn a total of 498.00 from holding CBL Associates Properties or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. CBL Associates Properties
Performance |
| Timeline |
| Federal Realty Investment |
| CBL Associates Properties |
Federal Realty and CBL Associates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and CBL Associates
The main advantage of trading using opposite Federal Realty and CBL Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, CBL Associates 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 CBL Associates will offset losses from the drop in CBL Associates' long position.| Federal Realty vs. Site Centers Corp | Federal Realty vs. Urban Edge Properties | Federal Realty vs. Retail Opportunity Investments | Federal Realty vs. Brixmor Property |
| CBL Associates vs. Kite Realty Group | CBL Associates vs. Site Centers Corp | CBL Associates vs. Urban Edge Properties | CBL Associates vs. Acadia Realty Trust |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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