Correlation Between CBL Associates and Alexanders

Can any of the company-specific risk be diversified away by investing in both CBL Associates and Alexanders 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 CBL Associates and Alexanders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CBL Associates Properties and Alexanders, you can compare the effects of market volatilities on CBL Associates and Alexanders 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 CBL Associates with a short position of Alexanders. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL Associates and Alexanders.

Diversification Opportunities for CBL Associates and Alexanders

-0.67

Correlation Coefficient

CBL Associates  Alexanders

Excellent diversification

The 3 months correlation between CBL and Alexanders is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CBL Associates Properties and Alexanders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexanders and CBL Associates 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 CBL Associates Properties are associated (or correlated) with Alexanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexanders has no effect on the direction of CBL Associates i.e., CBL Associates and Alexanders go up and down completely randomly.

Pair Corralation between CBL Associates and Alexanders

Considering the 90-day investment horizon CBL Associates Properties is expected to generate 1.06 times more return on investment than Alexanders. However, CBL Associates is 1.06 times more volatile than Alexanders. It trades about 0.19 of its potential returns per unit of risk. Alexanders is currently generating about -0.16 per unit of risk. If you would invest  2,611  in CBL Associates Properties on September 21, 2024 and sell it today you would earn a total of  340.00  from holding CBL Associates Properties or generate 13.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CBL Associates Properties  vs.  Alexanders

CBL Associates Properties

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CBL Associates Properties are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental drivers, CBL Associates disclosed solid returns over the last few months and may actually be approaching a breakup point.

Alexanders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexanders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CBL Associates and Alexanders

The main advantage of trading using opposite CBL Associates and Alexanders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBL Associates position performs unexpectedly, Alexanders 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 Alexanders will offset losses from the drop in Alexanders' long position.

The idea behind CBL Associates Properties and Alexanders 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.