Correlation Between National Storage and Urban Edge
Can any of the company-specific risk be diversified away by investing in both National Storage 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 National Storage and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Storage Affiliates and Urban Edge Properties, you can compare the effects of market volatilities on National Storage 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 National Storage with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Urban Edge.
Diversification Opportunities for National Storage and Urban Edge
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Urban is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates 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 National Storage 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 National Storage Affiliates 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 National Storage i.e., National Storage and Urban Edge go up and down completely randomly.
Pair Corralation between National Storage and Urban Edge
Considering the 90-day investment horizon National Storage is expected to generate 1.15 times less return on investment than Urban Edge. In addition to that, National Storage is 1.32 times more volatile than Urban Edge Properties. It trades about 0.14 of its total potential returns per unit of risk. Urban Edge Properties is currently generating about 0.21 per unit of volatility. If you would invest 1,689 in Urban Edge Properties on August 28, 2024 and sell it today you would earn a total of 624.00 from holding Urban Edge Properties or generate 36.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. Urban Edge Properties
Performance |
| Timeline |
| National Storage Aff |
| Urban Edge Properties |
National Storage and Urban Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Urban Edge
The main advantage of trading using opposite National Storage and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage 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.| National Storage vs. Public Storage | National Storage vs. Prologis | National Storage vs. EastGroup Properties | National Storage vs. Rexford Industrial Realty |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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