Correlation Between Urban Edge and AMREP
Can any of the company-specific risk be diversified away by investing in both Urban Edge and AMREP 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 AMREP 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 AMREP, you can compare the effects of market volatilities on Urban Edge and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and AMREP.
Diversification Opportunities for Urban Edge and AMREP
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and AMREP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Urban Edge i.e., Urban Edge and AMREP go up and down completely randomly.
Pair Corralation between Urban Edge and AMREP
Allowing for the 90-day total investment horizon Urban Edge is expected to generate 6.34 times less return on investment than AMREP. But when comparing it to its historical volatility, Urban Edge Properties is 3.72 times less risky than AMREP. It trades about 0.17 of its potential returns per unit of risk. AMREP is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,824 in AMREP on August 24, 2024 and sell it today you would earn a total of 862.00 from holding AMREP or generate 30.52% 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. AMREP
Performance |
| Timeline |
| Urban Edge Properties |
| AMREP |
Urban Edge and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and AMREP
The main advantage of trading using opposite Urban Edge and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's 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 |
| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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