Correlation Between Power REIT and Urstadt Biddle

Can any of the company-specific risk be diversified away by investing in both Power REIT and Urstadt Biddle 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 Power REIT and Urstadt Biddle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power REIT and Urstadt Biddle, you can compare the effects of market volatilities on Power REIT and Urstadt Biddle 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 Power REIT with a short position of Urstadt Biddle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Urstadt Biddle.

Diversification Opportunities for Power REIT and Urstadt Biddle

0.08

Correlation Coefficient

Power REIT  Urstadt Biddle

Significant diversification

The 3 months correlation between Power and Urstadt is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Urstadt Biddle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urstadt Biddle and Power REIT 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 Power REIT are associated (or correlated) with Urstadt Biddle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urstadt Biddle has no effect on the direction of Power REIT i.e., Power REIT and Urstadt Biddle go up and down completely randomly.

Pair Corralation between Power REIT and Urstadt Biddle

If you would invest  125.00  in Power REIT on September 2, 2024 and sell it today you would lose (4.00) from holding Power REIT or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Power REIT  vs.  Urstadt Biddle

Power REIT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Power REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Power REIT showed solid returns over the last few months and may actually be approaching a breakup point.

Urstadt Biddle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urstadt Biddle has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Urstadt Biddle is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Power REIT and Urstadt Biddle

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

The idea behind Power REIT and Urstadt Biddle 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.