Correlation Between Cedar Realty and NOVANT

Can any of the company-specific risk be diversified away by investing in both Cedar Realty and NOVANT 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 NOVANT 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 NOVANT 2637 01 NOV 36, you can compare the effects of market volatilities on Cedar Realty and NOVANT 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 NOVANT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and NOVANT.

Diversification Opportunities for Cedar Realty and NOVANT

0.46

Correlation Coefficient

Cedar Realty  NOVANT

Very weak diversification

The 3 months correlation between Cedar and NOVANT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and NOVANT 2637 01 NOV 36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVANT 2637 01 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 NOVANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVANT 2637 01 has no effect on the direction of Cedar Realty i.e., Cedar Realty and NOVANT go up and down completely randomly.

Pair Corralation between Cedar Realty and NOVANT

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 0.57 times more return on investment than NOVANT. However, Cedar Realty Trust is 1.76 times less risky than NOVANT. It trades about 0.11 of its potential returns per unit of risk. NOVANT 2637 01 NOV 36 is currently generating about -0.1 per unit of risk. If you would invest  1,421  in Cedar Realty Trust on September 14, 2024 and sell it today you would earn a total of  252.00  from holding Cedar Realty Trust or generate 17.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	34.92%
Values	Daily Returns

Cedar Realty Trust  vs.  NOVANT 2637 01 NOV 36

Cedar Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, Cedar Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

NOVANT 2637 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVANT 2637 01 NOV 36 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NOVANT 2637 01 NOV 36 investors.

Pair Trading with Cedar Realty and NOVANT

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

The idea behind Cedar Realty Trust and NOVANT 2637 01 NOV 36 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.