Correlation Between Urban Edge and American Assets
Can any of the company-specific risk be diversified away by investing in both Urban Edge and American Assets 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 Urban Edge and American Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Edge Properties and American Assets Trust, you can compare the effects of market volatilities on Urban Edge and American Assets 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 Urban Edge with a short position of American Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and American Assets.
Diversification Opportunities for Urban Edge and American Assets
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and American is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and American Assets Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Assets Trust and Urban Edge 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 Urban Edge Properties are associated (or correlated) with American Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Assets Trust has no effect on the direction of Urban Edge i.e., Urban Edge and American Assets go up and down completely randomly.
Pair Corralation between Urban Edge and American Assets
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 0.87 times more return on investment than American Assets. However, Urban Edge Properties is 1.15 times less risky than American Assets. It trades about 0.18 of its potential returns per unit of risk. American Assets Trust is currently generating about 0.07 per unit of risk. If you would invest 2,113 in Urban Edge Properties on August 26, 2024 and sell it today you would earn a total of 182.00 from holding Urban Edge Properties or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. American Assets Trust
Performance |
| Timeline |
| Urban Edge Properties |
| American Assets Trust |
Urban Edge and American Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and American Assets
The main advantage of trading using opposite Urban Edge and American Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, American Assets 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 American Assets will offset losses from the drop in American Assets' long position.| Urban Edge vs. Saul Centers | Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group | Urban Edge vs. Retail Opportunity Investments |
| American Assets vs. Essential Properties Realty | American Assets vs. Armada Hflr Pr | American Assets vs. CTO Realty Growth | American Assets vs. Brightspire Capital |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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