Correlation Between Urban Edge and American Healthcare
Can any of the company-specific risk be diversified away by investing in both Urban Edge and American Healthcare 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 American Healthcare 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 American Healthcare REIT,, you can compare the effects of market volatilities on Urban Edge and American Healthcare 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 American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and American Healthcare.
Diversification Opportunities for Urban Edge and American Healthcare
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Urban and American is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, 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 American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of Urban Edge i.e., Urban Edge and American Healthcare go up and down completely randomly.
Pair Corralation between Urban Edge and American Healthcare
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the American Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Urban Edge Properties is 1.48 times less risky than American Healthcare. The stock trades about -0.02 of its potential returns per unit of risk. The American Healthcare REIT, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,587 in American Healthcare REIT, on September 25, 2024 and sell it today you would earn a total of 235.50 from holding American Healthcare REIT, or generate 9.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Urban Edge Properties vs. American Healthcare REIT,
Performance |
Timeline |
Urban Edge Properties |
American Healthcare REIT, |
Urban Edge and American Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Urban Edge and American Healthcare
The main advantage of trading using opposite Urban Edge and American Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, American Healthcare 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 American Healthcare will offset losses from the drop in American Healthcare's long position.Urban Edge vs. Rithm Property Trust | Urban Edge vs. Site Centers Corp | Urban Edge vs. Retail Opportunity Investments | Urban Edge vs. Inventrust Properties Corp |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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