Correlation Between Inventrust Properties and Urban Edge

Can any of the company-specific risk be diversified away by investing in both Inventrust Properties and Urban Edge 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 Inventrust Properties and Urban Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inventrust Properties Corp and Urban Edge Properties, you can compare the effects of market volatilities on Inventrust Properties and Urban Edge 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 Inventrust Properties with a short position of Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventrust Properties and Urban Edge.

Diversification Opportunities for Inventrust Properties and Urban Edge

0.87

Correlation Coefficient

Inventrust Properties  Urban Edge

Very poor diversification

The 3 months correlation between Inventrust and Urban is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Inventrust Properties Corp and Urban Edge Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Edge Properties and Inventrust Properties 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 Inventrust Properties Corp are associated (or correlated) with Urban Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Edge Properties has no effect on the direction of Inventrust Properties i.e., Inventrust Properties and Urban Edge go up and down completely randomly.

Pair Corralation between Inventrust Properties and Urban Edge

Considering the 90-day investment horizon Inventrust Properties is expected to generate 1.53 times less return on investment than Urban Edge. But when comparing it to its historical volatility, Inventrust Properties Corp is 1.05 times less risky than Urban Edge. It trades about 0.27 of its potential returns per unit of risk. Urban Edge Properties is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  2,124  in Urban Edge Properties on August 12, 2024 and sell it today you would earn a total of  225.00  from holding Urban Edge Properties or generate 10.59% return on investment over 90 days.

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

Inventrust Properties Corp  vs.  Urban Edge Properties

Inventrust Properties

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inventrust Properties Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Inventrust Properties may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Urban Edge Properties

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Urban Edge Properties are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Urban Edge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inventrust Properties and Urban Edge

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

The idea behind Inventrust Properties Corp and Urban Edge Properties 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.