Correlation Between American Healthcare and Urban Edge
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Urban Edge 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 American Healthcare and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Urban Edge Properties, you can compare the effects of market volatilities on American Healthcare and Urban Edge 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 American Healthcare with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Urban Edge.
Diversification Opportunities for American Healthcare and Urban Edge
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Urban is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Urban Edge Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Edge Properties and American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Urban Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Edge Properties has no effect on the direction of American Healthcare i.e., American Healthcare and Urban Edge go up and down completely randomly.
Pair Corralation between American Healthcare and Urban Edge
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 1.43 times more return on investment than Urban Edge. However, American Healthcare is 1.43 times more volatile than Urban Edge Properties. It trades about 0.35 of its potential returns per unit of risk. Urban Edge Properties is currently generating about 0.19 per unit of risk. If you would invest 1,438 in American Healthcare REIT, on August 30, 2024 and sell it today you would earn a total of 1,519 from holding American Healthcare REIT, or generate 105.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Urban Edge Properties
Performance |
| Timeline |
| American Healthcare REIT, |
| Urban Edge Properties |
American Healthcare and Urban Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Urban Edge
The main advantage of trading using opposite American Healthcare and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Urban Edge 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 Urban Edge will offset losses from the drop in Urban Edge's long position.| American Healthcare vs. Boston Properties | American Healthcare vs. Douglas Emmett | American Healthcare vs. Kilroy Realty Corp | American Healthcare vs. Highwoods Properties |
| Urban Edge vs. Saul Centers | Urban Edge vs. Site Centers Corp | Urban Edge vs. Acadia Realty Trust | Urban Edge vs. Retail Opportunity Investments |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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