Correlation Between Elme Communities and Urban Edge
Can any of the company-specific risk be diversified away by investing in both Elme Communities 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 Elme Communities and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elme Communities and Urban Edge Properties, you can compare the effects of market volatilities on Elme Communities 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 Elme Communities with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elme Communities and Urban Edge.
Diversification Opportunities for Elme Communities and Urban Edge
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elme and Urban is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Elme Communities 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 Elme Communities 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 Elme Communities 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 Elme Communities i.e., Elme Communities and Urban Edge go up and down completely randomly.
Pair Corralation between Elme Communities and Urban Edge
Given the investment horizon of 90 days Elme Communities is expected to generate 2.31 times less return on investment than Urban Edge. But when comparing it to its historical volatility, Elme Communities is 1.0 times less risky than Urban Edge. It trades about 0.08 of its potential returns per unit of risk. Urban Edge Properties is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Urban Edge Properties on August 31, 2024 and sell it today you would earn a total of 532.00 from holding Urban Edge Properties or generate 30.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elme Communities vs. Urban Edge Properties
Performance |
| Timeline |
| Elme Communities |
| Urban Edge Properties |
Elme Communities and Urban Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elme Communities and Urban Edge
The main advantage of trading using opposite Elme Communities and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elme Communities 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.| Elme Communities vs. BRT Realty Trust | Elme Communities vs. Nexpoint Residential Trust | Elme Communities vs. Centerspace | Elme Communities vs. Veris Residential |
| Urban Edge vs. Saul Centers | Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group | 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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