Correlation Between GASBCM and Cedar Realty

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

By analyzing existing cross correlation between GASBCM 6129 23 FEB 38 and Cedar Realty Trust, you can compare the effects of market volatilities on GASBCM 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 GASBCM with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of GASBCM and Cedar Realty.

Diversification Opportunities for GASBCM and Cedar Realty

0.31

Correlation Coefficient

GASBCM  Cedar Realty

Weak diversification

The 3 months correlation between GASBCM and Cedar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding GASBCM 6129 23 FEB 38 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 GASBCM 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 GASBCM 6129 23 FEB 38 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 GASBCM i.e., GASBCM and Cedar Realty go up and down completely randomly.

Pair Corralation between GASBCM and Cedar Realty

Assuming the 90 days trading horizon GASBCM 6129 23 FEB 38 is expected to under-perform the Cedar Realty. But the bond apears to be less risky and, when comparing its historical volatility, GASBCM 6129 23 FEB 38 is 2.0 times less risky than Cedar Realty. The bond trades about -0.13 of its potential returns per unit of risk. The Cedar Realty Trust is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,556  in Cedar Realty Trust on September 24, 2024 and sell it today you would lose (97.00) from holding Cedar Realty Trust or give up 6.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.0%
Values	Daily Returns

GASBCM 6129 23 FEB 38  vs.  Cedar Realty Trust

GASBCM 6129 23

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GASBCM 6129 23 FEB 38 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for GASBCM 6129 23 FEB 38 investors.

Cedar Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cedar Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cedar Realty is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GASBCM and Cedar Realty

The main advantage of trading using opposite GASBCM and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GASBCM 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 GASBCM 6129 23 FEB 38 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.