Correlation Between UDR and Bank of Communications Co
Can any of the company-specific risk be diversified away by investing in both UDR and Bank of Communications Co 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 Bank of Communications Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and Bank of Communications, you can compare the effects of market volatilities on UDR and Bank of Communications Co 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 Bank of Communications Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and Bank of Communications Co.
Diversification Opportunities for UDR and Bank of Communications Co
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UDR and Bank is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications Co 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 Bank of Communications Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications Co has no effect on the direction of UDR i.e., UDR and Bank of Communications Co go up and down completely randomly.
Pair Corralation between UDR and Bank of Communications Co
Considering the 90-day investment horizon UDR is expected to generate 1.97 times less return on investment than Bank of Communications Co. But when comparing it to its historical volatility, UDR Inc is 2.66 times less risky than Bank of Communications Co. It trades about 0.09 of its potential returns per unit of risk. Bank of Communications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,413 in Bank of Communications on September 3, 2024 and sell it today you would earn a total of 396.00 from holding Bank of Communications or generate 28.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.93% |
| Values | Daily Returns |
UDR Inc vs. Bank of Communications
Performance |
| Timeline |
| UDR Inc |
| Bank of Communications Co |
UDR and Bank of Communications Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and Bank of Communications Co
The main advantage of trading using opposite UDR and Bank of Communications Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, Bank of Communications Co 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 Bank of Communications Co will offset losses from the drop in Bank of Communications Co's long position.| UDR vs. AvalonBay Communities | UDR vs. Essex Property Trust | UDR vs. Mid America Apartment Communities | UDR vs. Camden Property Trust |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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