Correlation Between Macerich and CBL Associates

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

By analyzing existing cross correlation between Macerich Company and CBL Associates Properties, you can compare the effects of market volatilities on Macerich and CBL Associates 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 Macerich with a short position of CBL Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macerich and CBL Associates.

Diversification Opportunities for Macerich and CBL Associates

0.34

Correlation Coefficient

Macerich  CBL Associates

Weak diversification

The 3 months correlation between Macerich and CBL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Macerich Company and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties and Macerich 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 Macerich Company are associated (or correlated) with CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Macerich i.e., Macerich and CBL Associates go up and down completely randomly.

Pair Corralation between Macerich and CBL Associates

Considering the 90-day investment horizon Macerich Company is expected to generate 1.85 times more return on investment than CBL Associates. However, Macerich is 1.85 times more volatile than CBL Associates Properties. It trades about 0.06 of its potential returns per unit of risk. CBL Associates Properties is currently generating about 0.1 per unit of risk. If you would invest  1,115  in Macerich Company on December 2, 2024 and sell it today you would earn a total of  689.00  from holding Macerich Company or generate 61.79% return on investment over 90 days.

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

Macerich Company  vs.  CBL Associates Properties

Macerich

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macerich Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CBL Associates Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBL Associates Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, CBL Associates is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Macerich and CBL Associates

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

The idea behind Macerich Company and CBL Associates Properties 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.