Correlation Between CBL Associates and Saul Centers

Can any of the company-specific risk be diversified away by investing in both CBL Associates and Saul Centers 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 Saul Centers 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 Saul Centers, you can compare the effects of market volatilities on CBL Associates and Saul Centers 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 Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL Associates and Saul Centers.

Diversification Opportunities for CBL Associates and Saul Centers

0.23

Correlation Coefficient

CBL Associates  Saul Centers

Modest diversification

The 3 months correlation between CBL and Saul is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CBL Associates Properties and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers 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 Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of CBL Associates i.e., CBL Associates and Saul Centers go up and down completely randomly.

Pair Corralation between CBL Associates and Saul Centers

Considering the 90-day investment horizon CBL Associates Properties is expected to generate 1.17 times more return on investment than Saul Centers. However, CBL Associates is 1.17 times more volatile than Saul Centers. It trades about 0.24 of its potential returns per unit of risk. Saul Centers is currently generating about 0.05 per unit of risk. If you would invest  2,545  in CBL Associates Properties on September 3, 2024 and sell it today you would earn a total of  545.00  from holding CBL Associates Properties or generate 21.41% return on investment over 90 days.

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

CBL Associates Properties  vs.  Saul Centers

CBL Associates Properties

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CBL Associates Properties are ranked lower than 18 (%) 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.

Saul Centers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saul Centers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Saul Centers is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CBL Associates and Saul Centers

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

The idea behind CBL Associates Properties and Saul Centers 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.