Correlation Between UDR and Emera Maine
Can any of the company-specific risk be diversified away by investing in both UDR and Emera Maine 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 UDR and Emera Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and Emera Maine PFD, you can compare the effects of market volatilities on UDR and Emera Maine 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 UDR with a short position of Emera Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and Emera Maine.
Diversification Opportunities for UDR and Emera Maine
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UDR and Emera is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Emera Maine PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Maine PFD and UDR 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 UDR Inc are associated (or correlated) with Emera Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Maine PFD has no effect on the direction of UDR i.e., UDR and Emera Maine go up and down completely randomly.
Pair Corralation between UDR and Emera Maine
Considering the 90-day investment horizon UDR Inc is expected to generate 3.77 times more return on investment than Emera Maine. However, UDR is 3.77 times more volatile than Emera Maine PFD. It trades about 0.04 of its potential returns per unit of risk. Emera Maine PFD is currently generating about 0.0 per unit of risk. If you would invest 3,703 in UDR Inc on September 2, 2024 and sell it today you would earn a total of 883.00 from holding UDR Inc or generate 23.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.03% |
| Values | Daily Returns |
UDR Inc vs. Emera Maine PFD
Performance |
| Timeline |
| UDR Inc |
| Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
UDR and Emera Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and Emera Maine
The main advantage of trading using opposite UDR and Emera Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, Emera Maine 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 Emera Maine will offset losses from the drop in Emera Maine's long position.| UDR vs. AvalonBay Communities | UDR vs. Essex Property Trust | UDR vs. Mid America Apartment Communities | UDR vs. Camden Property Trust |
| Emera Maine vs. Assurant | Emera Maine vs. QBE Insurance Group | Emera Maine vs. Direct Line Insurance | Emera Maine vs. The Hanover Insurance |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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