Correlation Between Urban Edge and Landsea Homes
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Landsea Homes 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 Landsea Homes 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 Landsea Homes Corp, you can compare the effects of market volatilities on Urban Edge and Landsea Homes 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 Landsea Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Landsea Homes.
Diversification Opportunities for Urban Edge and Landsea Homes
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Urban and Landsea is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Landsea Homes Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landsea Homes Corp 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 Landsea Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landsea Homes Corp has no effect on the direction of Urban Edge i.e., Urban Edge and Landsea Homes go up and down completely randomly.
Pair Corralation between Urban Edge and Landsea Homes
Allowing for the 90-day total investment horizon Urban Edge is expected to generate 1.59 times less return on investment than Landsea Homes. But when comparing it to its historical volatility, Urban Edge Properties is 1.99 times less risky than Landsea Homes. It trades about 0.07 of its potential returns per unit of risk. Landsea Homes Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 554.00 in Landsea Homes Corp on August 27, 2024 and sell it today you would earn a total of 539.00 from holding Landsea Homes Corp or generate 97.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. Landsea Homes Corp
Performance |
| Timeline |
| Urban Edge Properties |
| Landsea Homes Corp |
Urban Edge and Landsea Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and Landsea Homes
The main advantage of trading using opposite Urban Edge and Landsea Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Landsea Homes 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 Landsea Homes will offset losses from the drop in Landsea Homes' 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 |
| Landsea Homes vs. GCM Grosvenor | Landsea Homes vs. AerSale Corp | Landsea Homes vs. Arko Corp | Landsea Homes vs. Advantage Solutions |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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