Correlation Between Urban Edge and National Health
Can any of the company-specific risk be diversified away by investing in both Urban Edge and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on Urban Edge and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and National Health.
Diversification Opportunities for Urban Edge and National Health
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and National is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Urban Edge i.e., Urban Edge and National Health go up and down completely randomly.
Pair Corralation between Urban Edge and National Health
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the National Health. In addition to that, Urban Edge is 1.01 times more volatile than National Health Investors. It trades about -0.2 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.08 per unit of volatility. If you would invest 6,794 in National Health Investors on October 20, 2024 and sell it today you would earn a total of 138.00 from holding National Health Investors or generate 2.03% 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. National Health Investors
Performance |
| Timeline |
| Urban Edge Properties |
| National Health Investors |
Urban Edge and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and National Health
The main advantage of trading using opposite Urban Edge and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health'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 |
| National Health vs. Global Medical REIT | National Health vs. Healthpeak Properties | National Health vs. Ventas Inc | National Health vs. Omega Healthcare 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 CEOs Directory module to screen CEOs from public companies around the world.
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