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
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macerich and CBL is 0.46. 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 under-perform the CBL Associates. In addition to that, Macerich is 1.29 times more volatile than CBL Associates Properties. It trades about -0.08 of its total potential returns per unit of risk. CBL Associates Properties is currently generating about -0.05 per unit of volatility. If you would invest 2,851 in CBL Associates Properties on December 27, 2024 and sell it today you would lose (173.00) from holding CBL Associates Properties or give up 6.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Macerich Company vs. CBL Associates Properties
Performance |
Timeline |
Macerich |
CBL Associates Properties |
Macerich and CBL Associates Volatility Contrast
Predicted Return Density |
Returns |
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.Macerich vs. Kimco Realty | Macerich vs. Regency Centers | Macerich vs. Site Centers Corp | Macerich vs. Federal Realty Investment |
CBL Associates vs. Kite Realty Group | CBL Associates vs. Site Centers Corp | CBL Associates vs. Urban Edge Properties | CBL Associates vs. Acadia Realty Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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