Correlation Between CTO Realty and Clipper Realty

Can any of the company-specific risk be diversified away by investing in both CTO Realty and Clipper Realty 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 CTO Realty and Clipper Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTO Realty Growth and Clipper Realty, you can compare the effects of market volatilities on CTO Realty and Clipper Realty 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 CTO Realty with a short position of Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Clipper Realty.

Diversification Opportunities for CTO Realty and Clipper Realty

-0.42

Correlation Coefficient

CTO Realty  Clipper Realty

Very good diversification

The 3 months correlation between CTO and Clipper is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty and CTO 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 CTO Realty Growth are associated (or correlated) with Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of CTO Realty i.e., CTO Realty and Clipper Realty go up and down completely randomly.

Pair Corralation between CTO Realty and Clipper Realty

Considering the 90-day investment horizon CTO Realty Growth is expected to generate 0.41 times more return on investment than Clipper Realty. However, CTO Realty Growth is 2.43 times less risky than Clipper Realty. It trades about 0.04 of its potential returns per unit of risk. Clipper Realty is currently generating about 0.0 per unit of risk. If you would invest  1,524  in CTO Realty Growth on October 9, 2024 and sell it today you would earn a total of  417.00  from holding CTO Realty Growth or generate 27.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

CTO Realty Growth  vs.  Clipper Realty

CTO Realty Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTO Realty Growth are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CTO Realty is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Clipper Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clipper Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CTO Realty and Clipper Realty

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

The idea behind CTO Realty Growth and Clipper Realty 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.