Correlation Between Urstadt Biddle and Federal Realty

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

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

Diversification Opportunities for Urstadt Biddle and Federal Realty

0.15

Correlation Coefficient

Urstadt Biddle  Federal Realty

Average diversification

The 3 months correlation between Urstadt and Federal is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Urstadt Biddle Properties and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Urstadt Biddle 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 Urstadt Biddle Properties are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Urstadt Biddle i.e., Urstadt Biddle and Federal Realty go up and down completely randomly.

Pair Corralation between Urstadt Biddle and Federal Realty

If you would invest  2,274  in Urstadt Biddle Properties on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Urstadt Biddle Properties or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Urstadt Biddle Properties  vs.  Federal Realty Investment

Urstadt Biddle Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urstadt Biddle Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Urstadt Biddle is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Federal Realty Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federal Realty Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Federal Realty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Urstadt Biddle and Federal Realty

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

The idea behind Urstadt Biddle Properties and Federal Realty Investment 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..