Correlation Between Cedar Realty and Titan International

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

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

Diversification Opportunities for Cedar Realty and Titan International

-0.5

Correlation Coefficient

Cedar Realty  Titan International

Very good diversification

The 3 months correlation between Cedar and Titan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International and Cedar Realty 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 Cedar Realty Trust are associated (or correlated) with Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Cedar Realty i.e., Cedar Realty and Titan International go up and down completely randomly.

Pair Corralation between Cedar Realty and Titan International

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 0.94 times more return on investment than Titan International. However, Cedar Realty Trust is 1.06 times less risky than Titan International. It trades about 0.08 of its potential returns per unit of risk. Titan International is currently generating about -0.49 per unit of risk. If you would invest  1,562  in Cedar Realty Trust on February 7, 2024 and sell it today you would earn a total of  56.00  from holding Cedar Realty Trust or generate 3.59% return on investment over 90 days.

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

Cedar Realty Trust  vs.  Titan International

Cedar Realty Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Cedar Realty may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Titan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Cedar Realty and Titan International

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

The idea behind Cedar Realty Trust and Titan International 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.