Correlation Between Urban Edge and Equity Lifestyle
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Equity Lifestyle 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 Equity Lifestyle 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 Equity Lifestyle Properties, you can compare the effects of market volatilities on Urban Edge and Equity Lifestyle 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 Equity Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Equity Lifestyle.
Diversification Opportunities for Urban Edge and Equity Lifestyle
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and Equity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Equity Lifestyle Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Lifestyle Pro 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 Equity Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Lifestyle Pro has no effect on the direction of Urban Edge i.e., Urban Edge and Equity Lifestyle go up and down completely randomly.
Pair Corralation between Urban Edge and Equity Lifestyle
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the Equity Lifestyle. But the stock apears to be less risky and, when comparing its historical volatility, Urban Edge Properties is 1.09 times less risky than Equity Lifestyle. The stock trades about -0.11 of its potential returns per unit of risk. The Equity Lifestyle Properties is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 6,779 in Equity Lifestyle Properties on November 4, 2024 and sell it today you would lose (234.00) from holding Equity Lifestyle Properties or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. Equity Lifestyle Properties
Performance |
| Timeline |
| Urban Edge Properties |
| Equity Lifestyle Pro |
Urban Edge and Equity Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and Equity Lifestyle
The main advantage of trading using opposite Urban Edge and Equity Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Equity Lifestyle 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 Equity Lifestyle will offset losses from the drop in Equity Lifestyle's long position.| Urban Edge vs. Saul Centers | Urban Edge vs. Rithm Property Trust | Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group |
| Equity Lifestyle vs. UMH Properties | Equity Lifestyle vs. UDR Inc | Equity Lifestyle vs. AvalonBay Communities | Equity Lifestyle vs. Nexpoint Residential 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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