Correlation Between Titan Machinery and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Titan Machinery 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 Titan Machinery and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Cedar Realty Trust, you can compare the effects of market volatilities on Titan Machinery 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 Titan Machinery with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Cedar Realty.
Diversification Opportunities for Titan Machinery and Cedar Realty
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Titan and Cedar is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery 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 Titan Machinery 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 Titan Machinery 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 Titan Machinery i.e., Titan Machinery and Cedar Realty go up and down completely randomly.
Pair Corralation between Titan Machinery and Cedar Realty
Given the investment horizon of 90 days Titan Machinery is expected to under-perform the Cedar Realty. In addition to that, Titan Machinery is 1.08 times more volatile than Cedar Realty Trust. It trades about -0.07 of its total potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.05 per unit of volatility. If you would invest 1,298 in Cedar Realty Trust on August 28, 2024 and sell it today you would earn a total of 322.00 from holding Cedar Realty Trust or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan Machinery vs. Cedar Realty Trust
Performance |
| Timeline |
| Titan Machinery |
| Cedar Realty Trust |
Titan Machinery and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and Cedar Realty
The main advantage of trading using opposite Titan Machinery and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery 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.| Titan Machinery vs. Global Industrial Co | Titan Machinery vs. WESCO International | Titan Machinery vs. MSC Industrial Direct |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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