Correlation Between Urban Edge and Iron Mountain

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

Diversification Opportunities for Urban Edge and Iron Mountain

-0.52

Correlation Coefficient

Urban Edge  Iron Mountain

Excellent diversification

The 3 months correlation between Urban and Iron is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain rporated 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain rporated has no effect on the direction of Urban Edge i.e., Urban Edge and Iron Mountain go up and down completely randomly.

Pair Corralation between Urban Edge and Iron Mountain

Allowing for the 90-day total investment horizon Urban Edge Properties is expected to under-perform the Iron Mountain. In addition to that, Urban Edge is 1.13 times more volatile than Iron Mountain Incorporated. It trades about -0.08 of its total potential returns per unit of risk. Iron Mountain Incorporated is currently generating about -0.08 per unit of volatility. If you would invest  7,954  in Iron Mountain Incorporated on January 30, 2024 and sell it today you would lose (202.00) from holding Iron Mountain Incorporated or give up 2.54% of portfolio value over 90 days.

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

Urban Edge Properties  vs.  Iron Mountain Incorporated

Urban Edge Properties

Risk-Adjusted Performance

0 of 100

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 rather sound technical and fundamental indicators, Urban Edge is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Iron Mountain rporated

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iron Mountain Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Iron Mountain displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Urban Edge and Iron Mountain

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

The idea behind Urban Edge Properties and Iron Mountain Incorporated 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.