Correlation Between Urban Edge and West Loop
Can any of the company-specific risk be diversified away by investing in both Urban Edge and West Loop 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 West Loop 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 West Loop Realty, you can compare the effects of market volatilities on Urban Edge and West Loop 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 West Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and West Loop.
Diversification Opportunities for Urban Edge and West Loop
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Urban and West is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and West Loop Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Loop Realty 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 West Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Loop Realty has no effect on the direction of Urban Edge i.e., Urban Edge and West Loop go up and down completely randomly.
Pair Corralation between Urban Edge and West Loop
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 1.2 times more return on investment than West Loop. However, Urban Edge is 1.2 times more volatile than West Loop Realty. It trades about 0.17 of its potential returns per unit of risk. West Loop Realty is currently generating about 0.05 per unit of risk. If you would invest 2,061 in Urban Edge Properties on September 2, 2024 and sell it today you would earn a total of 240.00 from holding Urban Edge Properties or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. West Loop Realty
Performance |
| Timeline |
| Urban Edge Properties |
| West Loop Realty |
Urban Edge and West Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and West Loop
The main advantage of trading using opposite Urban Edge and West Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, West Loop 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 West Loop will offset losses from the drop in West Loop's long position.| Urban Edge vs. Federal Realty Investment | Urban Edge vs. National Retail Properties | Urban Edge vs. Kimco Realty |
| West Loop vs. Guggenheim Risk Managed | West Loop vs. Guggenheim Risk Managed | West Loop vs. Real Estate Fund | West Loop vs. Simt Managed Volatility |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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