Correlation Between NH HOTEL and UDR
Can any of the company-specific risk be diversified away by investing in both NH HOTEL 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 NH HOTEL and UDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and UDR Inc, you can compare the effects of market volatilities on NH HOTEL 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 NH HOTEL with a short position of UDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and UDR.
Diversification Opportunities for NH HOTEL and UDR
Very good diversification
The 3 months correlation between NH5 and UDR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and UDR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UDR Inc and NH HOTEL 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 NH HOTEL GROUP 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 NH HOTEL i.e., NH HOTEL and UDR go up and down completely randomly.
Pair Corralation between NH HOTEL and UDR
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 0.42 times more return on investment than UDR. However, NH HOTEL GROUP is 2.37 times less risky than UDR. It trades about -0.03 of its potential returns per unit of risk. UDR Inc is currently generating about -0.05 per unit of risk. If you would invest 627.00 in NH HOTEL GROUP on November 3, 2024 and sell it today you would lose (3.00) from holding NH HOTEL GROUP or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. UDR Inc
Performance |
| Timeline |
| NH HOTEL GROUP |
| UDR Inc |
NH HOTEL and UDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and UDR
The main advantage of trading using opposite NH HOTEL and UDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL 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.| NH HOTEL vs. Acadia Healthcare | NH HOTEL vs. Park Hotels Resorts | NH HOTEL vs. COVIVIO HOTELS INH | NH HOTEL vs. CARDINAL HEALTH |
| UDR vs. Equity Residential | UDR vs. AvalonBay Communities | UDR vs. INVITATION HOMES DL | UDR vs. Mid America Apartment Communities |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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