Correlation Between Urban Edge and Apartment Income

Can any of the company-specific risk be diversified away by investing in both Urban Edge and Apartment Income 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 Apartment Income 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 Apartment Income REIT, you can compare the effects of market volatilities on Urban Edge and Apartment Income 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 Apartment Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Apartment Income.

Diversification Opportunities for Urban Edge and Apartment Income

0.0

Correlation Coefficient

Urban Edge  Apartment Income

Pay attention - limited upside

The 3 months correlation between Urban and Apartment is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Apartment Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Income 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 Apartment Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Income REIT has no effect on the direction of Urban Edge i.e., Urban Edge and Apartment Income go up and down completely randomly.

Pair Corralation between Urban Edge and Apartment Income

If you would invest (100.00) in Apartment Income REIT on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Apartment Income REIT or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Urban Edge Properties  vs.  Apartment Income REIT

Urban Edge Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Urban Edge Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Apartment Income REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apartment Income REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Apartment Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Urban Edge and Apartment Income

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

The idea behind Urban Edge Properties and Apartment Income REIT 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..