Correlation Between GAMCO Global and Cedar Realty

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

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

Diversification Opportunities for GAMCO Global and Cedar Realty

-0.01

Correlation Coefficient

GAMCO Global  Cedar Realty

Good diversification

The 3 months correlation between GAMCO and Cedar is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust and GAMCO Global 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 GAMCO Global Gold are associated (or correlated) with Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of GAMCO Global i.e., GAMCO Global and Cedar Realty go up and down completely randomly.

Pair Corralation between GAMCO Global and Cedar Realty

Assuming the 90 days trading horizon GAMCO Global is expected to generate 6.42 times less return on investment than Cedar Realty. But when comparing it to its historical volatility, GAMCO Global Gold is 2.71 times less risky than Cedar Realty. It trades about 0.04 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,238  in Cedar Realty Trust on October 20, 2024 and sell it today you would earn a total of  347.00  from holding Cedar Realty Trust or generate 28.03% return on investment over 90 days.

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

GAMCO Global Gold  vs.  Cedar Realty Trust

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Cedar Realty Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with GAMCO Global and Cedar Realty

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

The idea behind GAMCO Global Gold and Cedar Realty Trust 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.