Correlation Between Macerich and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Macerich 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 Macerich and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macerich Company and Cedar Realty Trust, you can compare the effects of market volatilities on Macerich 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 Macerich with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macerich and Cedar Realty.
Diversification Opportunities for Macerich and Cedar Realty
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Macerich and Cedar is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Macerich Company 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 Macerich 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 Macerich Company 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 Macerich i.e., Macerich and Cedar Realty go up and down completely randomly.
Pair Corralation between Macerich and Cedar Realty
Considering the 90-day investment horizon Macerich Company is expected to generate 0.87 times more return on investment than Cedar Realty. However, Macerich Company is 1.14 times less risky than Cedar Realty. It trades about 0.06 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.04 per unit of risk. If you would invest 1,119 in Macerich Company on August 27, 2024 and sell it today you would earn a total of 853.00 from holding Macerich Company or generate 76.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macerich Company vs. Cedar Realty Trust
Performance |
| Timeline |
| Macerich |
| Cedar Realty Trust |
Macerich and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macerich and Cedar Realty
The main advantage of trading using opposite Macerich and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macerich 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.| Macerich vs. Kimco Realty | Macerich vs. Regency Centers | Macerich vs. Site Centers Corp | Macerich vs. Federal Realty Investment |
| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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