Correlation Between Cedar Realty and NI Holdings
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and NI Holdings 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 NI Holdings 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 NI Holdings, you can compare the effects of market volatilities on Cedar Realty and NI Holdings 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 NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and NI Holdings.
Diversification Opportunities for Cedar Realty and NI Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cedar and NODK is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings 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 NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of Cedar Realty i.e., Cedar Realty and NI Holdings go up and down completely randomly.
Pair Corralation between Cedar Realty and NI Holdings
Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.05 times less return on investment than NI Holdings. In addition to that, Cedar Realty is 1.63 times more volatile than NI Holdings. It trades about 0.12 of its total potential returns per unit of risk. NI Holdings is currently generating about 0.21 per unit of volatility. If you would invest 1,556 in NI Holdings on September 15, 2024 and sell it today you would earn a total of 112.00 from holding NI Holdings or generate 7.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cedar Realty Trust vs. NI Holdings
Performance |
Timeline |
Cedar Realty Trust |
NI Holdings |
Cedar Realty and NI Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cedar Realty and NI Holdings
The main advantage of trading using opposite Cedar Realty and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, NI Holdings 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 NI Holdings will offset losses from the drop in NI Holdings' long position.Cedar Realty vs. Simon Property Group | Cedar Realty vs. Saul Centers | Cedar Realty vs. Rithm Property Trust | Cedar Realty vs. Urban Edge Properties |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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