Correlation Between Kennedy Wilson and Cedar Realty

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

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

Diversification Opportunities for Kennedy Wilson and Cedar Realty

-0.21

Correlation Coefficient

Kennedy Wilson  Cedar Realty

Very good diversification

The 3 months correlation between Kennedy and Cedar is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings 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 Kennedy Wilson 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 Kennedy Wilson Holdings 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 Kennedy Wilson i.e., Kennedy Wilson and Cedar Realty go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Cedar Realty

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 0.89 times more return on investment than Cedar Realty. However, Kennedy Wilson Holdings is 1.12 times less risky than Cedar Realty. It trades about 0.18 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about -0.14 per unit of risk. If you would invest  816.00  in Kennedy Wilson Holdings on February 23, 2024 and sell it today you would earn a total of  181.00  from holding Kennedy Wilson Holdings or generate 22.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Kennedy Wilson Holdings  vs.  Cedar Realty Trust

Kennedy Wilson Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kennedy Wilson Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kennedy Wilson may actually be approaching a critical reversion point that can send shares even higher in June 2024.

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 latest weak performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kennedy Wilson and Cedar Realty

The main advantage of trading using opposite Kennedy Wilson and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kennedy Wilson 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 Kennedy Wilson Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.