Correlation Between Cedar Realty and Carlyle

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

By analyzing existing cross correlation between Cedar Realty Trust and The Carlyle Group, you can compare the effects of market volatilities on Cedar Realty and Carlyle 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 Cedar Realty with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Carlyle.

Diversification Opportunities for Cedar Realty and Carlyle

-0.41

Correlation Coefficient

Cedar Realty  Carlyle

Very good diversification

The 3 months correlation between Cedar and Carlyle is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Cedar Realty 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 Cedar Realty Trust are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Cedar Realty i.e., Cedar Realty and Carlyle go up and down completely randomly.

Pair Corralation between Cedar Realty and Carlyle

Assuming the 90 days trading horizon Cedar Realty Trust is expected to under-perform the Carlyle. In addition to that, Cedar Realty is 3.05 times more volatile than The Carlyle Group. It trades about -0.16 of its total potential returns per unit of risk. The Carlyle Group is currently generating about -0.29 per unit of volatility. If you would invest  1,925  in The Carlyle Group on September 24, 2024 and sell it today you would lose (112.00) from holding The Carlyle Group or give up 5.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Cedar Realty Trust  vs.  The Carlyle Group

Cedar Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cedar Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cedar Realty is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cedar Realty and Carlyle

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

The idea behind Cedar Realty Trust and The Carlyle Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.