Correlation Between Cedar Realty and YTL Berhad

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

Diversification Opportunities for Cedar Realty and YTL Berhad

-0.57

Correlation Coefficient

Cedar Realty  YTL Berhad

Excellent diversification

The 3 months correlation between Cedar and YTL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad 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 YTL Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of Cedar Realty i.e., Cedar Realty and YTL Berhad go up and down completely randomly.

Pair Corralation between Cedar Realty and YTL Berhad

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 0.77 times more return on investment than YTL Berhad. However, Cedar Realty Trust is 1.3 times less risky than YTL Berhad. It trades about 0.08 of its potential returns per unit of risk. YTL Berhad is currently generating about -0.13 per unit of risk. If you would invest  1,367  in Cedar Realty Trust on September 12, 2024 and sell it today you would earn a total of  162.00  from holding Cedar Realty Trust or generate 11.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Cedar Realty Trust  vs.  YTL Berhad

Cedar Realty Trust

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cedar Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

YTL Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YTL Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cedar Realty and YTL Berhad

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

The idea behind Cedar Realty Trust and YTL Berhad 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.