Correlation Between Rithm Property and Cedar Realty

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

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

Diversification Opportunities for Rithm Property and Cedar Realty

-0.58

Correlation Coefficient

Rithm Property  Cedar Realty

Excellent diversification

The 3 months correlation between Rithm and Cedar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Property Trust 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 Rithm Property 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 Rithm Property Trust 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 Rithm Property i.e., Rithm Property and Cedar Realty go up and down completely randomly.

Pair Corralation between Rithm Property and Cedar Realty

Considering the 90-day investment horizon Rithm Property Trust is expected to under-perform the Cedar Realty. In addition to that, Rithm Property is 1.53 times more volatile than Cedar Realty Trust. It trades about -0.07 of its total potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.12 per unit of volatility. If you would invest  1,112  in Cedar Realty Trust on September 19, 2024 and sell it today you would earn a total of  279.00  from holding Cedar Realty Trust or generate 25.09% return on investment over 90 days.

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

Rithm Property Trust  vs.  Cedar Realty Trust

Rithm Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rithm Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cedar Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cedar Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Rithm Property and Cedar Realty

The main advantage of trading using opposite Rithm Property and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Property 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 Rithm Property Trust 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.