Correlation Between Heartland Financial and UDR
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and UDR 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 Heartland Financial and UDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and UDR Inc, you can compare the effects of market volatilities on Heartland Financial and UDR 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 Heartland Financial with a short position of UDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and UDR.
Diversification Opportunities for Heartland Financial and UDR
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heartland and UDR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and UDR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UDR Inc and Heartland Financial 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 Heartland Financial USA are associated (or correlated) with UDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UDR Inc has no effect on the direction of Heartland Financial i.e., Heartland Financial and UDR go up and down completely randomly.
Pair Corralation between Heartland Financial and UDR
Assuming the 90 days horizon Heartland Financial USA is expected to generate 1.63 times more return on investment than UDR. However, Heartland Financial is 1.63 times more volatile than UDR Inc. It trades about 0.16 of its potential returns per unit of risk. UDR Inc is currently generating about 0.13 per unit of risk. If you would invest 5,820 in Heartland Financial USA on November 30, 2024 and sell it today you would earn a total of 430.00 from holding Heartland Financial USA or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 55.81% |
| Values | Daily Returns |
Heartland Financial USA vs. UDR Inc
Performance |
| Timeline |
| Heartland Financial USA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| UDR Inc |
Heartland Financial and UDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and UDR
The main advantage of trading using opposite Heartland Financial and UDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, UDR 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 UDR will offset losses from the drop in UDR's long position.| Heartland Financial vs. POSBO UNSPADRS20YC1 | Heartland Financial vs. Postal Savings Bank | Heartland Financial vs. Truist Financial | Heartland Financial vs. OVERSEA CHINUNSPADR2 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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