Correlation Between Weyco and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Weyco 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 Weyco and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Cedar Realty Trust, you can compare the effects of market volatilities on Weyco 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 Weyco with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Cedar Realty.
Diversification Opportunities for Weyco and Cedar Realty
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weyco and Cedar is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group 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 Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Cedar Realty go up and down completely randomly.
Pair Corralation between Weyco and Cedar Realty
Given the investment horizon of 90 days Weyco Group is expected to generate 2.25 times more return on investment than Cedar Realty. However, Weyco is 2.25 times more volatile than Cedar Realty Trust. It trades about 0.12 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.16 per unit of risk. If you would invest 3,368 in Weyco Group on August 28, 2024 and sell it today you would earn a total of 363.00 from holding Weyco Group or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Cedar Realty Trust
Performance |
| Timeline |
| Weyco Group |
| Cedar Realty Trust |
Weyco and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Cedar Realty
The main advantage of trading using opposite Weyco and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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.The idea behind Weyco Group and Cedar Realty Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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