Correlation Between Cedar Realty and Okeanis Eco

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

Diversification Opportunities for Cedar Realty and Okeanis Eco

0.07

Correlation Coefficient

Cedar Realty  Okeanis Eco

Significant diversification

The 3 months correlation between Cedar and Okeanis is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers 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 Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of Cedar Realty i.e., Cedar Realty and Okeanis Eco go up and down completely randomly.

Pair Corralation between Cedar Realty and Okeanis Eco

Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.1 times less return on investment than Okeanis Eco. But when comparing it to its historical volatility, Cedar Realty Trust is 1.03 times less risky than Okeanis Eco. It trades about 0.13 of its potential returns per unit of risk. Okeanis Eco Tankers is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,852  in Okeanis Eco Tankers on December 20, 2024 and sell it today you would earn a total of  496.00  from holding Okeanis Eco Tankers or generate 26.78% return on investment over 90 days.

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

Cedar Realty Trust  vs.  Okeanis Eco Tankers

Cedar Realty Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cedar Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

Okeanis Eco Tankers

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Okeanis Eco Tankers are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Okeanis Eco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cedar Realty and Okeanis Eco

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

The idea behind Cedar Realty Trust and Okeanis Eco Tankers 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.