Correlation Between Urban Edge and Inventrust Properties

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

Diversification Opportunities for Urban Edge and Inventrust Properties

0.76

Correlation Coefficient

Urban Edge  Inventrust Properties

Poor diversification

The 3 months correlation between Urban and Inventrust is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Inventrust Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventrust Properties 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 Inventrust Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventrust Properties has no effect on the direction of Urban Edge i.e., Urban Edge and Inventrust Properties go up and down completely randomly.

Pair Corralation between Urban Edge and Inventrust Properties

Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the Inventrust Properties. In addition to that, Urban Edge is 1.53 times more volatile than Inventrust Properties Corp. It trades about -0.03 of its total potential returns per unit of risk. Inventrust Properties Corp is currently generating about -0.04 per unit of volatility. If you would invest  3,008  in Inventrust Properties Corp on December 1, 2024 and sell it today you would lose (30.00) from holding Inventrust Properties Corp or give up 1.0% of portfolio value over 90 days.

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

Urban Edge Properties  vs.  Inventrust Properties Corp

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.

Inventrust Properties

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Urban Edge and Inventrust Properties

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

The idea behind Urban Edge Properties and Inventrust Properties Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.