Correlation Between Urban Edge and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Gladstone Commercial 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 Gladstone Commercial 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 Gladstone Commercial, you can compare the effects of market volatilities on Urban Edge and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Gladstone Commercial.
Diversification Opportunities for Urban Edge and Gladstone Commercial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and Gladstone is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of Urban Edge i.e., Urban Edge and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Urban Edge and Gladstone Commercial
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 0.87 times more return on investment than Gladstone Commercial. However, Urban Edge Properties is 1.15 times less risky than Gladstone Commercial. It trades about 0.05 of its potential returns per unit of risk. Gladstone Commercial is currently generating about 0.04 per unit of risk. If you would invest 2,083 in Urban Edge Properties on September 26, 2024 and sell it today you would earn a total of 65.00 from holding Urban Edge Properties or generate 3.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Urban Edge Properties vs. Gladstone Commercial
Performance |
Timeline |
Urban Edge Properties |
Gladstone Commercial |
Urban Edge and Gladstone Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Urban Edge and Gladstone Commercial
The main advantage of trading using opposite Urban Edge and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial'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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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