Correlation Between Urban Edge and CareTrust REIT
Can any of the company-specific risk be diversified away by investing in both Urban Edge and CareTrust REIT 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 CareTrust REIT 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 CareTrust REIT, you can compare the effects of market volatilities on Urban Edge and CareTrust REIT 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 CareTrust REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and CareTrust REIT.
Diversification Opportunities for Urban Edge and CareTrust REIT
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Urban and CareTrust is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT 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 CareTrust REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareTrust REIT has no effect on the direction of Urban Edge i.e., Urban Edge and CareTrust REIT go up and down completely randomly.
Pair Corralation between Urban Edge and CareTrust REIT
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 0.75 times more return on investment than CareTrust REIT. However, Urban Edge Properties is 1.33 times less risky than CareTrust REIT. It trades about -0.02 of its potential returns per unit of risk. CareTrust REIT is currently generating about -0.18 per unit of risk. If you would invest 2,164 in Urban Edge Properties on September 25, 2024 and sell it today you would lose (24.50) from holding Urban Edge Properties or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. CareTrust REIT
Performance |
| Timeline |
| Urban Edge Properties |
| CareTrust REIT |
Urban Edge and CareTrust REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and CareTrust REIT
The main advantage of trading using opposite Urban Edge and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, CareTrust REIT 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 CareTrust REIT will offset losses from the drop in CareTrust REIT's long position.| Urban Edge vs. Rithm Property Trust | Urban Edge vs. Site Centers Corp | Urban Edge vs. Retail Opportunity Investments | Urban Edge vs. Inventrust Properties Corp |
| CareTrust REIT vs. Global Medical REIT | CareTrust REIT vs. Universal Health Realty | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. Healthcare Realty Trust |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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