Correlation Between Cedar Realty and MI Homes

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and MI Homes 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 MI Homes 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 MI Homes, you can compare the effects of market volatilities on Cedar Realty and MI Homes 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 MI Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and MI Homes.

Diversification Opportunities for Cedar Realty and MI Homes

CedarMHODiversified AwayCedarMHODiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cedar and MHO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Homes 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 MI Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Homes has no effect on the direction of Cedar Realty i.e., Cedar Realty and MI Homes go up and down completely randomly.

Pair Corralation between Cedar Realty and MI Homes

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.29 times more return on investment than MI Homes. However, Cedar Realty is 1.29 times more volatile than MI Homes. It trades about 0.01 of its potential returns per unit of risk. MI Homes is currently generating about -0.21 per unit of risk. If you would invest  1,544  in Cedar Realty Trust on October 15, 2024 and sell it today you would lose (9.00) from holding Cedar Realty Trust or give up 0.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cedar Realty Trust  vs.  MI Homes

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-15-10-505
JavaScript chart by amCharts 3.21.15CDR-PB MHO
       Timeline  
Cedar Realty Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1414.51515.51616.5
MI Homes 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MI Homes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan130140150160170

Cedar Realty and MI Homes Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.19-6.88-4.58-2.270.02.284.596.919.22 0.010.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15CDR-PB MHO
       Returns  

Pair Trading with Cedar Realty and MI Homes

The main advantage of trading using opposite Cedar Realty and MI Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, MI Homes 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 MI Homes will offset losses from the drop in MI Homes' long position.
The idea behind Cedar Realty Trust and MI Homes 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.
Check out your portfolio center.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Fundamental Analysis
View fundamental data based on most recent published financial statements
FinTech Suite
Use AI to screen and filter profitable investment opportunities
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency