Correlation Between Urban Edge and Alexander Baldwin

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

Diversification Opportunities for Urban Edge and Alexander Baldwin

0.43

Correlation Coefficient

Urban Edge  Alexander Baldwin

Very weak diversification

The 3 months correlation between Urban and Alexander is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Alexander Baldwin Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexander Baldwin 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 Alexander Baldwin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexander Baldwin has no effect on the direction of Urban Edge i.e., Urban Edge and Alexander Baldwin go up and down completely randomly.

Pair Corralation between Urban Edge and Alexander Baldwin

Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 1.02 times more return on investment than Alexander Baldwin. However, Urban Edge is 1.02 times more volatile than Alexander Baldwin Holdings. It trades about -0.21 of its potential returns per unit of risk. Alexander Baldwin Holdings is currently generating about -0.38 per unit of risk. If you would invest  2,282  in Urban Edge Properties on September 21, 2024 and sell it today you would lose (125.00) from holding Urban Edge Properties or give up 5.48% of portfolio value over 90 days.

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

Urban Edge Properties  vs.  Alexander Baldwin Holdings

Urban Edge Properties

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Urban Edge Properties are ranked lower than 2 (%) 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.

Alexander Baldwin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexander Baldwin Holdings 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 strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Urban Edge and Alexander Baldwin

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

The idea behind Urban Edge Properties and Alexander Baldwin Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.