Correlation Between Invesco Real and Urban Edge

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

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

Diversification Opportunities for Invesco Real and Urban Edge

-0.14

Correlation Coefficient

Invesco Real  Urban Edge

Good diversification

The 3 months correlation between Invesco and Urban is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Real Estate 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 Invesco Real 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 Invesco Real Estate 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 Invesco Real i.e., Invesco Real and Urban Edge go up and down completely randomly.

Pair Corralation between Invesco Real and Urban Edge

Assuming the 90 days horizon Invesco Real Estate is expected to under-perform the Urban Edge. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Real Estate is 1.13 times less risky than Urban Edge. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Urban Edge Properties is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,101  in Urban Edge Properties on September 20, 2024 and sell it today you would earn a total of  28.00  from holding Urban Edge Properties or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Real Estate  vs.  Urban Edge Properties

Invesco Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Urban Edge Properties

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Urban Edge Properties are ranked lower than 1 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Invesco Real and Urban Edge

The main advantage of trading using opposite Invesco Real and Urban Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Real 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 Invesco Real Estate 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.