Correlation Between Firm Capital and Urban Edge
Can any of the company-specific risk be diversified away by investing in both Firm Capital 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 Firm Capital and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firm Capital Property and Urban Edge Properties, you can compare the effects of market volatilities on Firm Capital 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 Firm Capital with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Urban Edge.
Diversification Opportunities for Firm Capital and Urban Edge
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firm and Urban is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Property 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 Firm Capital 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 Firm Capital Property 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 Firm Capital i.e., Firm Capital and Urban Edge go up and down completely randomly.
Pair Corralation between Firm Capital and Urban Edge
Assuming the 90 days horizon Firm Capital Property is expected to under-perform the Urban Edge. But the pink sheet apears to be less risky and, when comparing its historical volatility, Firm Capital Property is 1.24 times less risky than Urban Edge. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Urban Edge Properties is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Urban Edge Properties on August 28, 2024 and sell it today you would earn a total of 97.00 from holding Urban Edge Properties or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Firm Capital Property vs. Urban Edge Properties
Performance |
| Timeline |
| Firm Capital Property |
| Urban Edge Properties |
Firm Capital and Urban Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firm Capital and Urban Edge
The main advantage of trading using opposite Firm Capital and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firm Capital 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.| Firm Capital vs. Global Net Lease, | Firm Capital vs. VICI Properties | Firm Capital vs. Highlands REIT | Firm Capital vs. W P Carey |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |