Correlation Between UDR and Beijing Capital
Can any of the company-specific risk be diversified away by investing in both UDR and Beijing Capital 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 Beijing Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and Beijing Capital International, you can compare the effects of market volatilities on UDR and Beijing Capital 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 Beijing Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and Beijing Capital.
Diversification Opportunities for UDR and Beijing Capital
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UDR and Beijing is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Beijing Capital International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Capital Inte 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 Beijing Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Capital Inte has no effect on the direction of UDR i.e., UDR and Beijing Capital go up and down completely randomly.
Pair Corralation between UDR and Beijing Capital
Considering the 90-day investment horizon UDR is expected to generate 1.2 times less return on investment than Beijing Capital. But when comparing it to its historical volatility, UDR Inc is 6.46 times less risky than Beijing Capital. It trades about 0.13 of its potential returns per unit of risk. Beijing Capital International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Beijing Capital International on September 3, 2024 and sell it today you would lose (2.00) from holding Beijing Capital International or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UDR Inc vs. Beijing Capital International
Performance |
| Timeline |
| UDR Inc |
| Beijing Capital Inte |
UDR and Beijing Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and Beijing Capital
The main advantage of trading using opposite UDR and Beijing Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, Beijing Capital 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 Beijing Capital will offset losses from the drop in Beijing Capital'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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