Correlation Between Cedar Realty and Lucid

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

Diversification Opportunities for Cedar Realty and Lucid

-0.49

Correlation Coefficient

Cedar Realty  Lucid

Very good diversification

The 3 months correlation between Cedar and Lucid is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Cedar Realty i.e., Cedar Realty and Lucid go up and down completely randomly.

Pair Corralation between Cedar Realty and Lucid

Assuming the 90 days trading horizon Cedar Realty Trust is expected to under-perform the Lucid. But the preferred stock apears to be less risky and, when comparing its historical volatility, Cedar Realty Trust is 1.54 times less risky than Lucid. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Lucid Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  225.00  in Lucid Group on October 6, 2024 and sell it today you would earn a total of  104.00  from holding Lucid Group or generate 46.22% return on investment over 90 days.

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

Cedar Realty Trust  vs.  Lucid 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 current stock price disturbance, may contribute to short-term losses for the investors.

Lucid Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Lucid is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cedar Realty and Lucid

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

The idea behind Cedar Realty Trust and Lucid 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 Commodity Directory module to find actively traded commodities issued by global exchanges.