Correlation Between Altisource Asset and Urban Edge

Can any of the company-specific risk be diversified away by investing in both Altisource Asset and Urban Edge 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 Altisource Asset and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altisource Asset Management and Urban Edge Properties, you can compare the effects of market volatilities on Altisource Asset and Urban Edge 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 Altisource Asset with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altisource Asset and Urban Edge.

Diversification Opportunities for Altisource Asset and Urban Edge

-0.17

Correlation Coefficient

Altisource Asset  Urban Edge

Good diversification

The 3 months correlation between Altisource and Urban is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Altisource Asset Management and Urban Edge Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Edge Properties and Altisource Asset 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 Altisource Asset Management are associated (or correlated) with Urban Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Edge Properties has no effect on the direction of Altisource Asset i.e., Altisource Asset and Urban Edge go up and down completely randomly.

Pair Corralation between Altisource Asset and Urban Edge

Given the investment horizon of 90 days Altisource Asset Management is expected to under-perform the Urban Edge. In addition to that, Altisource Asset is 3.5 times more volatile than Urban Edge Properties. It trades about -0.83 of its total potential returns per unit of risk. Urban Edge Properties is currently generating about 0.08 per unit of volatility. If you would invest  2,143  in Urban Edge Properties on September 13, 2024 and sell it today you would earn a total of  100.00  from holding Urban Edge Properties or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.35%
Values	Daily Returns

Altisource Asset Management  vs.  Urban Edge Properties

Altisource Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altisource Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Urban Edge Properties

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Urban Edge Properties are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Urban Edge is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Altisource Asset and Urban Edge

The main advantage of trading using opposite Altisource Asset and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altisource Asset position performs unexpectedly, Urban Edge 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 Urban Edge will offset losses from the drop in Urban Edge's long position.

The idea behind Altisource Asset Management and Urban Edge Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.