Correlation Between Boston Beer and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Cedar Realty Trust, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Cedar Realty.
Diversification Opportunities for Boston Beer and Cedar Realty
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Cedar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Cedar Realty go up and down completely randomly.
Pair Corralation between Boston Beer and Cedar Realty
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Cedar Realty. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.22 times less risky than Cedar Realty. The stock trades about 0.0 of its potential returns per unit of risk. The Cedar Realty Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,051 in Cedar Realty Trust on September 3, 2024 and sell it today you would earn a total of 587.00 from holding Cedar Realty Trust or generate 55.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Cedar Realty Trust
Performance |
| Timeline |
| Boston Beer |
| Cedar Realty Trust |
Boston Beer and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Cedar Realty
The main advantage of trading using opposite Boston Beer and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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