Correlation Between Urban Edge and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Urban Edge and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Dow Jones.
Diversification Opportunities for Urban Edge and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Urban Edge i.e., Urban Edge and Dow Jones go up and down completely randomly.
Pair Corralation between Urban Edge and Dow Jones
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 1.27 times more return on investment than Dow Jones. However, Urban Edge is 1.27 times more volatile than Dow Jones Industrial. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 2,195 in Urban Edge Properties on August 24, 2024 and sell it today you would earn a total of 98.50 from holding Urban Edge Properties or generate 4.49% 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. Dow Jones Industrial
Performance |
| Timeline |
Urban Edge and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Urban Edge Properties
Pair trading matchups for Urban Edge
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Urban Edge and Dow Jones
The main advantage of trading using opposite Urban Edge and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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