Correlation Between Cedar Realty and INGERSOLL

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

Diversification Opportunities for Cedar Realty and INGERSOLL

0.13

Correlation Coefficient

Cedar Realty  INGERSOLL

Average diversification

The 3 months correlation between Cedar and INGERSOLL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and INGERSOLL RAND LUXEMBOURG FINA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND LUXEM 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 INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND LUXEM has no effect on the direction of Cedar Realty i.e., Cedar Realty and INGERSOLL go up and down completely randomly.

Pair Corralation between Cedar Realty and INGERSOLL

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 7.54 times more return on investment than INGERSOLL. However, Cedar Realty is 7.54 times more volatile than INGERSOLL RAND LUXEMBOURG FINANCE. It trades about 0.0 of its potential returns per unit of risk. INGERSOLL RAND LUXEMBOURG FINANCE is currently generating about -0.01 per unit of risk. If you would invest  1,568  in Cedar Realty Trust on October 5, 2024 and sell it today you would lose (23.00) from holding Cedar Realty Trust or give up 1.47% of portfolio value over 90 days.

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

Cedar Realty Trust  vs.  INGERSOLL RAND LUXEMBOURG FINA

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.

INGERSOLL RAND LUXEM

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cedar Realty and INGERSOLL

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

The idea behind Cedar Realty Trust and INGERSOLL RAND LUXEMBOURG FINANCE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.